Understanding Spanish mortgage options based on Visa type
An understanding of the various Spanish residency Visa options and mortgage product facilities is important. When considering taking up Spanish residency.
Whether to buy or rent a home, may depend on access to a mortgage in Spain. Therefore the criteria of Spanish Banks and terms and conditions that can be gained. There is often an assumption that residency immediately provides access to resident Mortgages in Spain. This is not the case.
HQP Visa Type
- HQP Visas in Spain
In an increasingly global job market, Spain has adapted Visa facilities to encourage highly qualified professionals to consider Spain. The Highly Qualified Professional (HQP) Visa, also known as the “Visado de Trabajo y Residencia para Profesionales Altamente Cualificados,” is specifically designed for non-residents aiming to live and work in Spain. With a streamlined application process and numerous benefits.
The HQP Visa targets professionals with specialized skills. Or advanced degrees, who are set to work in managerial, technical, or research positions in Spain. It allows a pathway to permanent residency after a 2 year period.
Many applicants of this type of Visa may want to consider purchasing a main residence. Rather than renting. Whilst the Visa provides residency this should not be confused with the ability to apply for resident Spanish Mortgages.
Criteria to apply for a resident Mortgage in Spain
Spanish Banks require to see a sustained and prolonged period of applicants in the Spanish financial system before they will offer resident terms and conditions. For most Banks this will be a minimum of a full year in the tax and social security system. A few may consider resident term and conditions if the applicant has a permanent contract and have been in their job a minimum of 6 months.
Applying for a Mortgage in Spain is possible but non resident Spanish loan conditions will be applied. The key difference being the maximum loan to value. For residents this is 80%. For non residents it is normally 70%.
Because of the nature of the HQP Visa. Also the overall quality of the profile of the individual. Spanish Banks will be keen to lend. However they will consider the possible short term period of the Visa. As this type of professional may move roles regularly.
Beckhams law Visa Type
- Beckham’s Law style visas
Officially known as the “Special Tax Regime for Foreigners,” this law is designed to attract highly skilled professionals, including athletes and entertainers. As well as other foreign nationals who wish to live and work in Spain. The Visa allows for wealthy individuals to only pay income tax on monies earned or brought into Spain. Rather than their worldwide financial situation. With progressive tax bands in Spain normally up to 47% on worldwide incomes, the Visa allows individuals to mitigate significant tax liability. But still reside in Spain.
As with the HQP visa lenders in Spain will still require to see the applicant is embedded to living in Spain before offering resident terms and conditions. Also with this type of Visa, to apply in the future for a resident loan, the Spanish incomes declared in Spain will need to be sufficient to meet loan criteria. If incomes from elsewhere need to be used only non resident conditions will be offered.
Other visa Types
- Digital Nomad, wok visas and Non lucrative Visas
Digital Nomad visas and non lucrative Visas and standard work visas allow individuals to settle in Spain. They all have minimum requirements for income levels. They also all require that incomes are declared in Spain even if under dual taxation treaties no further tax is payable.
Most work visas mean the individual will have a Spanish contract and immediately will pay Spanish income tax and be part of the social security system. For applicants on this type of visa access to resident terms and conditions will not however be immediate. As with HQP visa holders they will need to show medium to long term documentation to prove they have been in the system. Also a long term link to a life in Spain.
For digital nomads and those on non lucrative visas it is unlikely the applicant for a Spanish mortgage will ever be offered more than non resident terms and conditions. Where the incomes are generated and initially taxed usually dictates how the Bank in Spain views the application.
In conclusion
Before deciding on buying a main residence and undertaking the Spanish mortgage application process, consult a Spanish mortgage specialist. Therefore gaining a full understanding of what as a mortgage applicant you can expect, is a good idea. A regulated and professional broker can help you understand your budget maximums and ensure you are aware of any limitations you may experience.