Andalucia property tax discount due to finish December 2021
During 2021 to help kick start the housing market after COVID lockdown the Andalucian government discounted property transfer tax.
Spanish property transfer tax dropped to 7% for all purchases rather than having a increasing level based on purchase price.
The discount on transfer tax is due to finish in December leaving only a couple of months for buyers to get a purchase in Spain completed before the potential of increased taxation in 2022.
There has been no indication that the region will extend the tax break beyond 2021 but that does of course remain a possibility.
Arrange a mortgage in Spain now
For buyers requiring a mortgage in Spain, to complete before the year end, then mortgage applications should be being made soon.
Regulation changes in the Spanish Mortgage market from June 2019 mean that the timescale from application to completion has extended.
Whilst financial approvals with Spanish Banks remain relatively quick to obtain, the total process is longer.
An obligatory 14 day cooling of period between binding offer an completion is required.
Spanish Mortgage applications made in November should beat deadline
Mortgage in Spain applications made in November should still meet the December deadline. Any applications not with the lenders by mid to late November may struggle to meet the timescales.
The taxation reduction are very large for buyers buying in excess 400k and even more so for those buying above 750k.
With interest rates in Spain. at an all time low, and full term fixed rates available, even for cash buyers a loan can make sense.
Variable rates for non resident home loans in Spain can start from 1.5% above 12 month Euribor. Fixed rates fixed for a full 10, 15 or even 20 years can be as low as 2.5%, possibly even lower for a 10 year fix.
Whilst interest rates on investments and savings remain low worldwide for most buyers with cash or investments a mortgage in Spain is worth considering. Gaining a loan in Spain at 2.5% fixed for the long term could mean investments held have a greater yield than the outgoing.
Lending in Spain only available for purchases.
The Spanish mortgage market does not allow for a loan to be taken out after completion. This is the case except in a few circumstances like home improvements or buying another property in Spain. It is not possible to release funds at a later date to move them out of Spain.
The only opportunity therefore to obtain gearing against the purchase in Spain is to take a Mortgage in Spain for completion.
For further information on Mortgages in Spain contact us today