How to get a mortgage in Spain if you work offshore

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What if you work offshore and want to buy a property in Spain and need a mortgage? How does the application work when you don’t have a tax domicile or income tax liabilities? This article provides the answers. 

A bit of background on offshore

Before we get down to the mortgage application – and an explanation of the terms involving offshore – what does ‘offshore’ mean?

 Firstly, there’s offshore employment and this usually has a literal meaning. For example, offshore employment applies if you work on an oil ring or on a yacht or cruise ship. 

The non-land location of the job may well mean that you don’t live in one country for more than 183 days a year. Since income tax liabilities are based on your domicile for more than 183 days a year, you could have no income tax liabilities in a specific country. As a result, you may have no income tax declarations. 

What about offshore for banks? 

In the private banking world “offshore” describes accounts and services located outside the client’s country of residence. In practice, offshore workers tend to have offshore bank accounts. 

Getting a mortgage in Spain if you work offshore 

It might come as a surprise to discover that you can get a mortgage in Spain if you work offshore and have no income tax liabilities or declarations. Even more surprising perhaps is that the process can be straightforward. 

“The caveat, however, lies as always in your mortgage advisor,” says Katherine Walkerdine, a founding partner at Mortgage Direct. “Getting a mortgage in Spain if you work offshore involves different paperwork and ultimately hinges on a good relationship with the bank.”

The process 

The first step is to ensure you meet the bank’s affordability criteria. In our experience, the lack of tax declaration shouldn’t be an obstacle. In fact, our offshore clients have easily  shown proof of their income, typically by providing bank statements (up to 24 months if necessary), salary slips (usually 6 months) and an employment contract. 

Meeting anti-money laundering regulations

The bank providing your mortgage in Spain will need to check the precedence of your funds, an essential part of anti-money laundering regulations. Usually providing valid proof of address will tick this box but if your bank requires further evidence, we can provide assistance. 

The conditions 

You might think that an offshore mortgage applicant starts at a disadvantage compared to an onshore client with income tax declarations at their disposal. However, the good news is that our offshore clients find no such discrimination. 

A lower LTV? Not necessarily

The absence of a tax declaration should, in theory, mean banks lower the amount they’re prepared to lend. As a result, an offshore client could typically expect the loan-to-value (LTV) to drop from 70% to 60% or even 50%. 

However, and again, this is where the right mortgage advisor comes in, we have managed to get the highest borrowing amount for our clients. We achieve this through our network of contacts in the Spanish mortgage banking world. 

Resident interest rates? Very possible

Again, you might expect the interest rates available to offshore clients to be on par with those offered to non-residents. Yet again, this isn’t necessarily the case if your mortgage advisor negotiates the best deal for you. As a result, it’s very feasible to obtain resident interest rates for an offshore client. 

Non-euro mortgages? Also possible 

Using the right mortgage advisor could also allow you to take out a mortgage in Spain in a currency other than euros. Our in-depth knowledge of lenders will allow us to source the one who accepts earnings or assets in a non-euro currency. Or we can apply a solution such as buying through a Spanish limited company.

* This article has been written by a third party not owned or controlled by Spanish Property Insight (SPI).
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