Advantages for property owners renting property in Spain

Property owners in Spain who rent out their Flats could save 70% in Insurance Costs
In an interview on Spanish television, the Spanish Housing Minister, Carme Chacón, spoke about government plans to help property owners rent out their flats. In the latest proposals landlords could save up to 70% on multi-risk household insurance which would protect their property against defects and damage.

The Minister explained that under these proposals the costs of taking out insurance on a 70 m2 flat would drop from 170 euros to just 55 euros. She said that reduction in insurance costs would be available through the Public Renting Society.

Furthermore Chacón said that these proposals would be included in the State Plan for Housing, so that the highest number of people would be able to benefit from a grant of 6000 euros, already in place, destined for property owners who rent out their empty flats or houses. All landlords who rent out empty property will be entitled to this grant regardless of how large the property is or how much the rent costs.

The Housing Minister said that these proposals which are intended to get more flats and houses onto the rental market will be formally presented by the Housing Ministry next week.

Chacón explained that for many people in Spain housing was the second most important social issue but for the young it was the first. Moreover, as well as supporting ‘vivienda protegida’ (council housing) destined for sale Chacón is also in favour of publicly rented public housing in an effort to put an end to what she called ‘Spain’s sad record of having the oldest age for leaving home in Europe’.

The cost of changing or cancelling a mortgage in Spain to drop sharply

The cost of cancelling a mortgage with a Spanish bank is to drop by 80%

The Economic and Finance Commission for the Senate is expected to pass the law on reforming the mortgage market so that this proposed legislation can be sent directly to congress. If the law is passed it will reduce the cost of modifying the conditions of a mortgage by up to 80%. It won’t have to go to the upper chamber again given that it has already been passed by the commission.

The measure has the support of all parliamentary groups except for IU-ICV. It is intended to reduce the costs of modifying the conditions of a mortgage by 80% as it will no longer be necessary to undersign a new mortgage therefore reducing considerably notary, registration and tax costs. The legislation will also affect ‘reverse mortgages’.

Mortgage cancellation costs: The cost of cancelling a mortgage will go down from 1% to 0.25%. This means that the cost of cancelling an average mortgage of 150,000 euros at 27 years will go down from 1500 euros to 375 euros.

Mortgage substitution costs: If you change your mortgage from a fixed or mixed to a variable interest rate the cost will remain the same at 0.25% except for when interest rates are below those at which the mortgage was taken out.
Notary costs: Going to a notary will now only cost 30 euros in contrast to the current costs which are calculated against the value of your assets with a minimum cost of 90 euros.

Registration Duties: The discount of 90% which currently only applies to substituting or renewing of a mortgage that is going from a variable to a fixed rate will apply to all mortgages. Therefore according to this the cost of cancelling an average mortgage will be reduced from 300 euros to 52.2 euros.

Registration Costs: These will be reduced from 111 euros to 25 euros.

Reverse Mortgages: These will be exempt from tax for legal and documentation costs and also notary duties will be reduced. Those people who have reverse mortgages can get a tax exemption of up to 10,000 euros when they make their tax declaration if the money from their reverse mortgage is going to be paid into a pension plan.

Related: Mortgages in Spain # Mortgages for non-residents in Spain