Offshore or UK based?
Mortgages
There are banks and other financial companies in many countries as well as Spain that will lend money to purchase a property in Spain. They will secure the loan either on a property in your own country or on the Spanish property itself. Spanish banks in Spain will also lend funds to non-residents to purchase properties. The normal limit is 60% of the purchase price.
There are both advantages and disadvantages to obtaining a mortgage in Spain instead of the UK. With a mortgage in Spain, there may be high set-up costs; £1,000-£2,000 is not unusual. You may also have to pay taxes and fees to the country where the property is located. These can be around 2.5% of the value of the mortgage. One advantage is that you will pay local interest rates, which are normally lower than those in the UK are.
Be aware that if you are going to be repaying your Spanish mortgage from your UK income, you may lose a substantial amount of money in the ever-changing exchange rates.
In any circumstances, you must take qualified legal advice before you sign anything. It is advisable to start the mortgage process before you look for a property. At least if you have a mortgage offer from a bank in principle, you will not waste time looking for a property you cannot purchase.
Another thing to consider when purchasing a property in Spain is, in what name(s) to purchase. You can purchase it in your sole name, with a partner or in a company name. We can and do provide Offshore Companies and Bank Accounts .
All have good and bad points and we are upfront and honest about them all. There are substantial tax savings to be made because of the Spanish tax system and in particular, Inheritance Taxes, which can be higher than 70%. It is in your best interests therefore for the property to change hands as little possible.
