The following is an enquiry we received today from Ruud, interested in releasing value from his home in Spain. More and more people are looking to release equity from their Spanish home, while having the legal right to stay there, for life. It’s a big thing back in the UK and in France. Now, the Spanish are freeing up cash from their biggest assets and we think expats are going to jump on this soon too.
Dear Ruud,
Thanks for getting in touch.
Equity release in Spain is becoming more and more popular. It’s a way in a nutshell, for you to unlock the value of your Spanish property. The way we have seen it work for our clients allows you access or release the equity (ie cash) tied up in your home. Generally you need to be over 65 and “ideally” there should be no mortgage on the property. It can be arranged that the investor pays off an existing mortgage.
You, as a property owner in Spain, can release the money in a lump sum or in several smaller amounts, following an initial lump sum. All these details are discussed in advance with the investor. (as is the value of your property)
Are you familiar with Usufructo in Spain?
This is a legal right allowing you to live in the property until the end of your days. While you own the usufructo, an investor will acquire the property, after your time.
Generally, you are the full “owner” of the property, although the bare ownership is owned by a third party. (the investor) They have no access or ability to use the house during the duration of the usufructo.
It is all signed in the notary, with Pedro our barrister, so you know it is very official. The change of ownership will all be noted in the land registry- including your rights to live there.
You do have to pay the local Suma bills, community fees and you´re responsible for the upkeep of the property.
It will only extinguish after your death. You family ideally should be aware of the details so that there is no shock for them down the road! We have seen children really encourage their parents to do it, in order to take full advantage of all they have worked so hard for.
If you’d like us to give you more details, for example exactly how much equity you can expect to release just get in touch with us here and we´ll talk to Pedro about your specific case.
Hope this helps to explain Usufructo and equity release in Spain! If you need more information about the Documents required when selling a property
Do you have any questions about this or any other equity release possibility in Spain? Spanish Solutions can help organise your mortgage, re-mortgage in Spain or anything else that you may need. Contact us on the comments section or by email.
Nicola.
105 Comments
Michael Normington
Hi Can I have the information on equity release please.
Kind regards
Michael Normington