Introduction

Hi All,

Just to introduce ourselves, Jill and Garry.

In the process of buying a villa off plan in murcia.

We are a little worried about the strength of the Euro though, this will have a massive effect if it stay's as is or worsen's?

If we take funds over we lose massive in the exchange rate, if we take a mortgage in Euro's we pay through the nose on "arrangement fee's" and 7% I.V.A.Tax for the luxury of borrowing their money etc.. So one lose's both way's.

Will have to get my head round this before long but it is a canundrum.

I have my doubt's about the economics of renting out as well. If the Spanish taxman takes 25% before any bills are paid and the rental agent takes 20% ....that  leaves  the guy who is taking all the risk's and own's the property with 55% . From this you need to pay the mortgage and everything else..... Seems a very large chunk of " would be" profit  for the hangers on.

Has anyone any experiance of renting out? Is this going to be a problem paying out 45% and then being able to pay any mortgages etc? Any information on these would put our minds at rest and give us and everyone else on this forum a little in-sight.

Any Ideas anyone or any different interpretations?

Send a private e-mail if you like?

Hi Tanboy and welcome to the forum. The rate will improve in time but thats no help if you have to transfer now. Yes you will have opening fees and maybe a broker fee, but this may be better in the long term if you are planning with regards to inheritance taxes etc.

You will have purchase costs regardless of how you actaully pay for it - the 7% is the purchase tax and payable anyway. Your total costs (and this is general rule of thumb) should be around 11% cash purchases and 13% for mortgage purchase although this depends on the lender etc.

Rent wise you are correct in the tax but then you can claim costs back if you are being correct. Your lawyer can advise you te best way to structure things to ensure you are tax eficient.

I would strongly advise you to have a word with Smiley on this forum who is a mortgage broker but also has a wealth of knowledge with regards to the best way to buy including reduction of inheritance tax etc. Send him a pm or pm me and I will send you his details if you want.

Hi Rixxy, we had a wonderful time, thanks. Spent many happy hours with many EOS members, "Karensun" & her OH a few times, "Semijubilada" & her OH, "Formentera Costa" & her OH, "Hudsey" & her OH. "Aunty Em" was ill sadly so she & "Kenco" never made it out to Spain.    We were on the beach on Christmas morning with our bottle of Cava, joining in the fun with thousands of others. Rather a ritual isn't it ?

Oh yes, I love the way the Spanish embrace and adopt other counrties rituals. We have 2 xmases and a new year so things started on the 21st with the office staff lunch (polite way of describing it!) then off over the UK xmas and its rituals followed by a few days recovery then went to Madird to see in the new year in the main square (equivalent to Big Ben - just smaller with everyone wering costumes and wigs scoffing the 12 grapes and drinking cava - again!) Then follwed by few more days rest and Spanish xmas, the 3 kings processions on the 5th, the day on the 6th followed by a bank hol on the 7th!

Bit of a shock getting back to work yesterday with an 8am start and finally finishing at 830 pm! I was hoping for a gentle ease into it!