Record month for mortgage enquiries in Spain
Welcome to our latest mortgage news update! Last month, we recorded our highest number of mortgage enquiries in Spain since our founding 15 years ago. This surge indicates a robust demand for property purchases in Spain. With the recent UK government announcement permitting foreign travel for activities like buying, selling, or renting a residential property, we anticipate even more interest in Spanish real estate.
Mortgage Direct visits Barcelona
Next week, our mortgage adviser Stuart Payne will visit Barcelona to share insights and experiences from the local mortgage and property market. Reflecting on a memorable morning in May last year—day 53 of the first lockdown—he recalls cycling through the empty streets of Barcelona past the Arc de Triomf. The few people out had until 10 am before having to return indoors. This experience underscores the resilience and adaptability of the city and its residents.
Special Purpose Vehicle (SPV)
Many clients opt to set up Special Purpose Vehicle (SPV) companies for property purchases in Spain. An SPV, usually a Spanish limited company, is designed to maximize tax efficiency for specific business purposes. These entities can be used to buy property and either cease trading post-purchase or continue renting out the property.
Benefits of using an SPV
SPVs offer several advantages, including tax efficiency and the ability to secure mortgages for both Spanish and foreign entities. Recently, we’ve seen approvals for properties throughout Spain purchased through SPVs. Generally, the maximum loan-to-value (LTV) ratio is 60%, with mortgage terms limited to 20 years. Banks evaluate the financial profiles of company directors or shareholders, or they may require a guarantee from a parent company.
Expert tax and legal advice
Before setting up an SPV, we recommend seeking professional tax advice. We work with top tax and wealth planning experts in Spain to help structure your purchase effectively. This step is crucial to managing tax liabilities and maximizing financial benefits.
Contact us
For a free, no-obligation consultation, contact us or request a meeting with one of our experienced advisers. We are here to guide you through purchasing property in Spain and maximizing the benefits of an SPV.