Spanish property ownership is a fairly common part of many expat wealth management strategies. However, Spanish taxes have been known to present obstacles to some expats in this regard and the uptake of both home ownership and property investment in Spain has suffered as a result.
Previously, the law held that expat buyers must pay mortgage tax out of their own pockets, which, as well as being an administrative annoyance also left many expats feeling a little like second-class citizens; however, with changes recently introduced by parliament, the tax will instead be paid by the bank financing the mortgage, with the new rules taking effect immediately.
Just as elsewhere in the globe, the key to successful wealth management in Spain is all about considering the impact and efficiency of expenses while balancing them against income and assets.
As such, the mortgage tax changes could have significant impact on the wealth management plans of some expat investors: prior to the change, the legal and tax costs of buying a property in Spain could easily be worth 10 percent or more of the sale price. This will now drop by around 2 percent, which is a considerable saving and has the potential to be especially valuable when applied to the purchase of higher value properties.
The move will almost certainly be welcomed by expats in Spain, and their financial advisers, as it should mean savings on property purchases which could be invested elsewhere – for example, into regular savings plans or into other aspects of expat retirement planning experience. It also slightly reduces Spain’s reputation for excessive property tax and administration charges.
Coming at a time when property purchase and rental prices are on the rise in Spain, the tax change may just mean that Spain’s wealth management options have been rescued. As we know, Spain is a top choice for Brits who want to move abroad, but in recent years the expense involved meant that other destinations began to look more attractive.
Help from Blacktower Today
Purchasing a property in Spain is not an easy process. Although the latest law changes regarding mortgage tax do lift some of the financial burden, there remains no substitute for a strong wealth management and tax planning strategy.
The wealth management advisers at Blacktower’s Spanish offices can help you review your investment assets and plan your financial future. For more information, contact us today.
The above article was kindly provided by Blacktower Financial Management Group and originally posted at: https://www.blacktowerfm.com/news/654-spain-removes-mortgage-tax-burden