HOW DO YOU FUND A HOLIDAY PROPERTY?

small house bird box

1.     CASH
2.     CASH WITH A MORTGAGE TOP-UP
3.     SPANISH MORTGAGE
4.     UK MORTGAGE
5.     “CROWD FUNDING”
These ideas may seem obvious but not everyone thinks of all the possibilities particularly if they hadn’t thought of the combination in point two or five.

CASH:

This is straight forward. You find a property you pay for it with money!! Remember that you do have to pay tax on your purchase, usually about 13% of the purchase price, in Spain. The other thing is to get a good rate of exchange when handing your cash over. If you know that you are definitely buying, it may be to your advantage to exchange when the rates are in your favour and put the money into a Spanish bank account which you will need to go ahead with your purchase. This is where currency houses can help you get the best rates.

CASH WITH A MORTGAGE TOP-UP :

This is either the means of buying a property or to upgrade your purchase to a property type that you wouldn’t otherwise consider. This involves paying for the majority of the purchase price in cash and having a small mortgage at a relatively small monthly payment.

 SPANISH MORTGAGE :

Yes, contrary to some reports you can still get a mortgage in Spain!! Usually this is up to 60% of the purchase price. This means that you do have to have a cash sum to put down as a deposit. Until recently 3 Spanish Banks offered 100-115% mortgages (subject to status) meaning that the purchase price plus taxes etc can be covered by the mortgage. Now there is just one which offers this (subject to status) but only on certain properties.

UK MORTGAGE OR RE-MORTGAGE:

For some people it may be simpler to raise money on their UK property especially if they are mortgage-free or only have a small mortgage.

“CROWD FUNDING” :

No we are not talking about high finance here!! Just people getting together and buying a property which individually they could not afford. This might be easy with family members but is still possible with friends. Obviously you would need to make sure through your lawyer/s the arrangements for buying the property, use of the property and selling on in the future. If parents, for example, intend to leave the property to family members in the future this is where you need the advice of a Spanish Lawyer as Inheritance Taxes etc are different in Spain from the UK.

REMEMBER TO CONSULT YOUR FINANCIAL ADVISER WHEN CONSIDERING ANY OF THE ABOVE WAYS OF BUYING.

Keith Pintointernational

You May Also Enjoy

small house bird box
Breaking News

UK First Time Buyers better off than many other global nations

Is it really that bad being a first-time buyer? UK better off than many other global nations when it comes to affordability The latest market analysis from Yopa, the full-service estate agents, reveals that first-time buyers (FTBs) in the UK may be paying 63% more to get a foot on the property ladder than they…
Read More
new build homes colchester essex
Breaking News

Building Safety Regulator Reform

The Government has announced reforms to the Building Safety Regulator, including leadership, process and investment. The changes are hoped to deliver 1.5 million homes. The reforms pave the way for creation of a single construction safety regulator, as recommended by the Grenfell Tower enquiry. David Smith, property litigation partner at London law firm Spector Constant…
Read More
Breaking News

New anti-money laundering rules now in effect: what landlords need to know

New anti-money laundering (AML) rules came into effect this month, marking a significant change for landlords and the lettings industry as a whole. The new rules mean financial sanctions checks are now required for all lettings, regardless of how much rent is charged. Here, Steve Bond, managing director of residential lettings for Beresfords, explains what…
Read More
Breaking News

What landlords need to know about the upcoming Renters Rights Bill

The government’s long-awaited Renters Rights Bill is one of the most significant overhauls of the private rental sector in decades. While it has not yet received royal assent, the legislation is expected to come into effect late this year, or early in 2026. With the bill moving closer to becoming law, Steven Bond, managing director…
Read More
Breaking News

Mortgage approvals bounce back in May

The latest figures show that: – Mortgage approvals on house purchases for May sat at 63,032 up 3.9% from 60,656 in April. The monthly increase seen in May marks the end of four months of previous decline, with approval levels having fallen each month since January of this year. Approvals are also 2.5% higher than…
Read More
Breaking News

Money and Credit – May 2025

Key points: Net borrowing of mortgage debt by individuals increased by £2.8 billion to £2.1 billion in May, following a large decrease in net borrowing of £13.8 billion to -£0.8 billion in April. Net mortgage approvals for house purchases increased by 2,400 to 63,000 in May. Approvals for remortgaging also increased by 6,200 to 41,500…
Read More