# Mortgage/Tax Advice



## Alan Huyton (Mar 11, 2008)

We have decided to purchase a property near Alcala La Real (Jaen) we have visited several times and enjoy the rural life and the close proximity to Granada. We can buy outright but are wondering about taking on a mortgage. We can get a mortgage via the Abbey National in the UK as they are part of the Santander Group but there does seem to be additional costs when converting from Euro's to Sterling. The alternative is to get a mortgage direct with a Spanish bank and pay direct in Euros. Has anyone got experiences of this and suggestions/advice? Also any inside info on whether to go via a broker or direct to the Spanish bank. 

I have agreed with my UK employer to work in the UK part time and commute to Spain, my intension is pay tax in the UK, take out Private Health Cover for our time in Spain, does this seem a reasonable plan. Will will be liable for any Spanish tax charges? We are still working on the details but would appreciate all opinions and advice.

Thanks in advance. Alan & Linda.


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## jojo (Sep 20, 2007)

Alan Huyton said:


> We have decided to purchase a property near Alcala La Real (Jaen) we have visited several times and enjoy the rural life and the close proximity to Granada. We can buy outright but are wondering about taking on a mortgage. We can get a mortgage via the Abbey National in the UK as they are part of the Santander Group but there does seem to be additional costs when converting from Euro's to Sterling. The alternative is to get a mortgage direct with a Spanish bank and pay direct in Euros. Has anyone got experiences of this and suggestions/advice? Also any inside info on whether to go via a broker or direct to the Spanish bank.
> 
> I have agreed with my UK employer to work in the UK part time and commute to Spain, my intension is pay tax in the UK, take out Private Health Cover for our time in Spain, does this seem a reasonable plan. Will will be liable for any Spanish tax charges? We are still working on the details but would appreciate all opinions and advice.
> 
> Thanks in advance. Alan & Linda.


The only bit I know is that Spanish banks are not keen to lend money to people who havent lived in Spain for less than two years???? unless its changed???? 

And also if you're working and paying your NI contributions in the UK there is a reciprocal agreement with Spain so you should be covered for healthcare. This is the case for me and my family. But check this out cos I'm no expert

Jo xxxx


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## Pesky Wesky (May 10, 2009)

jojo said:


> The only bit I know is that Spanish banks are not keen to lend money to people who havent lived in Spain for less than two years???? unless its changed????
> 
> Jo xxxx


I don't know but it might well have changed because remember how a few months ago no-one, Spanish or foreigner, could get a mortgage? But now banks are trying to attract home buyers again.


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## jojo (Sep 20, 2007)

SteveHall said:


> Jojo, it has changed MASSIVELY. The Spanish banks are now prostituting themselves again to offer mortgages on their stock of homes. 100% is now possible again (112% if one is "clever")
> 
> Private health has been knocked around on here a few times recently so search "sanitas" and you'll get good advice.
> 
> Tax? You need a GOOD gestor/accountant at both ends who know what they are doing with your unique situation. Plenty on the coast but sorry I don't know the guys in your area. Love the area though. Enjoy!




Coincidentally I've just been talking to a mortgage broker here this afternoon (my daughters friends father) and altho the banks here are now willing to offer good deals on properties now and better percentages, they are still not comfy with giving mortgages to non-residents or those who they consider to be anything less than an incredibly safe risk (his words!!!) But Alan may well be included in that category !!!!

Jo xx


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## jojo (Sep 20, 2007)

SteveHall said:


> The broker may well only have access to a certain bank or network of banks because of his contract. Here are a few that I know will talk turkey (or English! LOL) CAM, BdV, CajaSol, Caja Murcia, Caja Madrid, Segovia and Sabadell. Equally I know that DB are still "stiff"


Talk Turkey??? This is Spain and I dont think the OP is turkish??????? This chap deals with most of the main banks. He says they're wanting to lend the money but not take the silly risks - even on their repos as Spain isnt out of the woods yet!?


Jo xxxx


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## jojo (Sep 20, 2007)

SteveHall said:


> "Talk turkey" just means "talk business"
> 
> Look, the Bank of Spain has TOLD its constituent banks that they MUST get rid of their housing stocks. As there are not the first time buyers and as the expats are returning home and INCREASING the number of empty houses (1,4 million plus) the banks are having to be less selective. A few months ago even a 70% mortgage for a non-resident could be hassle now the banks are getting out their old files and literally calling the applicants to say, "Do you want us to reconsider?"
> 
> ...



Oh I see. Thats sort of a similar story from this mortgage broker chap, TBH most of it went over my head. But he was most insistent that the banks are terrified of anymore high risk, "toxic" lending and have been given some serious guidelines!

Its all a big a big risk at the mo tho! 



Jo xxx


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## bakeja (May 26, 2009)

If you can prove your income comfortably you should be able to get a mortgage easily enough in Spain, so if you are working in the UK then that should be OK (don't mention that you are going part-time in the future if that will reduce your income to a level which puts the mortgage in doubt).

However just because you can get a mortgage in Spain doesn't mean you should. I have one and in my experience the standard Spanish mortgage is terribly expensive and inflexible. Stunning fees and costs on set-up, interest rate collars that we weren't told about and almost impossible to vary the repayment and pay some back early. There is also the currency risk to consider. If you have a Euro mortgage but earn in sterling (as you intend to) then you are exposed to a fall in the value of the pound against the Euro, but will gain vice versa. The costs of buying Euros to pay the mortgage shouldn't be that great as there are specialist companies who charge only about 1c as a spread.

As for the health insurance I am sure Jo is right about getting at least a couple of free years in the state system. Whether you will be able to just carry on paying UK taxes on your earnings depends on what you mean by part time. If Linda lives in Spain more or less full time, you have your only residence here and you only go back to work for a few days a month then you are going to struggle to maintain the argument that you are still UK resident. In this case you will be liable to Spanish tax on your world-wide income BUT there is a 60.000€ allowance for overseas earnings which have already been subject to tax which may mean you can exclude the UK part time earnings as long as you pay your due in the UK.

Good luck with your move. I know Alcala and the surrounds and it is a beautiful part of Spain.


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## gus-lopez (Jan 4, 2010)

Actually as you are working & paying tax /NI in the Uk you should be covered under the reciprocal healthcare agreement allowing you full healthcare in Spain. Google E-109 & you'll get details. This has to be renewed every year to keep up your entitlement. Failing that if you have paid full ni cont. you are entitled to a max. of 2,1/2 years cover for cont. paid. I'd have thought that what you are proposing would entitle you to full E-109 cover.


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## jojo (Sep 20, 2007)

gus-lopez said:


> Actually as you are working & paying tax /NI in the Uk you should be covered under the reciprocal healthcare agreement allowing you full healthcare in Spain. Google E-109 & you'll get details. This has to be renewed every year to keep up your entitlement. Failing that if you have paid full ni cont. you are entitled to a max. of 2,1/2 years cover for cont. paid. I'd have thought that what you are proposing would entitle you to full E-109 cover.


I can vouch for that - well certainly for my children who are covered because my husband/their father works and pays NI in the UK, so this reciprocal agreement thing kicks in and we dont have to pay, altho we do have to pay for prescriptions! - I guess I'm covered too, altho fortunately I've not needed to try it out for me yet!! 

Jo xxx


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## Stravinsky (Aug 12, 2007)

bakeja said:


> As for the health insurance I am sure Jo is right about getting at least a couple of free years in the state system. .


Yes, but it depends on your payments into the UK system over the previous years, and of course the process means that you would probably have to be a Spanish resident, and therefore not eligible for UK NHS health care any more


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