Posts Tagged ‘Market’
This blog will be providing you with tailored advice on how to avoid these pitfalls when buying or selling property in Spain.
The Spanish property market has been through a turbulent period over the last decade. EU Property Solutions work with borrowers assisting them out of difficult situations often not caused by themselves as they fell victim to the Property Crash.
The 2007-2008 crash has led to people looking to sell and get out of the property burden and those looking for a bargain investment.
We have a few pointers if you’re considering buying or selling a property in Spain.
Price the Property to Sell
- The property market in Spain has masses of supply currently, especially in the British/Foreign investor market.
- Your property needs to be priced to sell, or it will sit on the market for a long time.
Will you clear any outstanding mortgage and debts?
- Will your sales proceeds (sales price less costs) clear your outstanding mortgage?
- Do you owe any debts for IBI taxes or Community Fees?
- If you do not clear the mortgage your lender will not release their charge on the property and the sale cannot complete.
- 3% Capital Gains tax if you are a non-Spanish Resident.
- Estate Agent fees are 3-6% of the sales price.
- Energy Efficiency Certificate typically €150-€300.
- Plus Valia Tax – this is a local tax on the increase in the value of the rateable value of the land.
- Legal conveyancing fees
- Land Registry Fees
- Notary Fees
- Income Tax Provision when purchasing from non-residents.
- Bank fees for money transfers and mortgage fees.
Future Costs of Ownership
- IBI Taxes
- Community Fees
- Non-resident tax
It all adds up.
Understand what you are buying.
- Research is essential
- Is your mortgage affordable in the long term? Does the rate change?
- What rental yield can you achieve – be careful if you have been promised a yield. These often don’t materialise.
Brexit and your registrations.
- Have your NIE number ready well before starting the purchase process
- Open a Spanish Bank account well before the purchase process.
- Brexit implications for use of property need to be understood.
If you’re interested in hearing first-hand from our Chairman Terry Bell elaborate on any of the above, you can sign up for our free webinar that we’re hosting on Thursday 16th September at 6PM ‘FREE WEBINAR | Brexit and Covid-19 | What does this mean for property values?’ Click HERE to sign up!
PS: Don’t forget to visit our YouTube channel to access a full library of our free videos & webinars. CLICK HERE
A frequently asked question that we’ve been receiving recently has been “My Foreign Loan has been sold – Help!”
As we come out of Covid-19, Banks worldwide are looking to tidy up their acts. This usually takes the form of:
- Writing off bad or delinquent debt,
- Pressurising those struggling to maintain payments, and
- The worst of all – selling their loans to Vulture Funds.
When Banks start to struggle, they look to take the pain of quickly writing off what they see as ‘bad debts’ and then look to ‘cash out’.
By ‘cash out’ we mean to sell these loans at a discount. That then frees up capital funds and for them, they do not have to manage delinquent accounts.
This ‘hassle’ factor has become more prevalent for our dear foreign banks over time and with this recession, we believe, and we are hearing such Loan Sales are and will become more prevalent going forward.
The purchases of such loans are usually referred to as ‘Vulture Funds’ and their key characteristics and agendas are best summarised by the following facts:
- They are usually International Funds, Hedge or Venture Capital in nature,
- Unlike the European Banks, they are strong in their approach to cross-jurisdictional issues and collection of debts,
- They are looking for short term successors/cash flow from the portfolio they purchase from the Banks,
- In the main, they are not long-term lenders, and most importantly, and
- They are far more aggressive in their recovery approach, wanting their ‘pounds of flesh’.
A ‘long story short’ – Vulture Funds will:
- Be in it for the short term,
- Be legally aggressive with non-payers,
- Chase across borders more efficiently than the Banks, and
- Look to recover every €/£ they are owed.
We have several cases which saw us start our work with a Bank but they, in turn, sold that on to a ‘Vulture Fund’. That then requires us to pivot in terms of attitude, stance, and most importantly the strategy for our client.
If your Spanish/Cypriot/Portuguese mortgage loan has been sold to a third party AKA Vulture Fund, it is vital that you know your options.
Our specialist team are here to provide you with a strategy to alleviate foreign property debt as a whole.
You can also head over and watch our latest YouTube video on Vulture Funds, click HERE.