Equity Release in Spain

This topic contains 4 replies, has 4 voices, and was last updated by  HG 2 days, 17 hours ago.

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  • #189332

    Mark Boston
    Participant

    dear Mark ,

    my wife and I live between London and Barcelona and have owned a duplex apartment in Diagonal Mar . Are there any reputable equity release schemes for British  nationals who own property in Spain . With best wishes Mark Boston

     

  • #189355

    Mark Stücklin
    Keymaster

    Mark,

    This is what a mortgage professional I have consulted has to say:

    Equity release in Spain is more complicated than in Britain. It may be possible for a long standing and loyal customer if funds are re-invested in Spain (another property, a business, etc.). In any event the bank would not finance 100% of the new project or property value but part of it, irrespective of the value of the security, so for example:

    – Existing unencumbered property worth € 500,000
    – New property or business project investment: € 300,000
    – The bank may consider financing part of the new project, perhaps € 150,000 or € 200,000.
    – Mortgage subject to status and valuation.

    So it matters a lot why you want to take equity out of the property, and how you plan to spend the money.

    Another mortgage expert told me it’s the same story with pretty much all banks in Spain. They will only write an equity-release mortgage if the funds freed-up are used for another property related investment in Spain, not just so you can get your hands on some cash.

    Does that help?

  • #228242

    Anna GG
    Participant

    Dear Mark

    I live in the UK with no intentions of moving. I’m in the midst of inheriting an Spanish city centre apartment fortunately valued at a lower figure than its true market value for Spanish inheritance tax. I would love to keep the apartment as an investment and rent it out.

    However the inheritance tax bill is around €200,000. Is it possible to re-mortgage the apartment? There is no outstanding mortgage or loans against it. Any suggestions please on how I could finance this?

    Thanks

    Anna

  • #228248

    Mark Stücklin
    Keymaster

    Hi Anna,

    I think you would struggle to get a loan from a Spanish bank unless you are a very good customer. You might have better luck with a British bank. That said it might be worth checking with a good mortgage broker in Spain, you never know. Let me know if you need a recommendation.

    Mark

  • #228421

    HG
    Participant

    Getting financing from a UK bank is probably easier as you are resident there.

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