Equity Release in Spain

[gruff]

I believe the question has been asked quite recently but it got lost somehow. My friend needs another car but doesn't have the money. Equity release like in the UK would be ideal. Is there a similar thing in Spain?

[Beachcomber]

There was but they may have all gone to ground. Anyway, I wouldn't do it and especially not just to buy a new car!

If there is no alternative check here first:

https://erva.es/

[costakid]

I believe the question has been asked quite recently but it got lost somehow. My friend needs another car but doesn't have the money. Equity release like in the UK would be ideal. Is there a similar thing in Spain?

Thats a very expensive way of buying a car. A straight lease or finance option would be much cheaper.

[elusive]

Unless its a Porsche!! Or Lamborghini.

Agree just get finance

[gruff]

O.k. thanks. I just thought as he has nobody to pass his house on to releasing some of the equity would be a good idea.

[elusive]

If its to use the money for more than just a car and theres no one to leave it to... i guess it depends on how much you can get

[Trooperman]

Beachcomber wrote: they may have all gone to ground

I recall one of those first presentations by a bunch of scammers back in 2004 (or thereabouts). The scheme I saw, was sold as an inheritance tax avoidance scheme but was, in fact, equity release facilitated by mortgaging a property (with an inflated valuation) with a bank in Switzerland and investing 80% of the released sum with an Icelandic Bank and the investement interest earned was intended to pay the interest on the Swiss loan. The (unfortunate) home owner then pocketed the 20%, but when the Icelandic bank went t1ts-up and the scammers had no money to pay the Swiss, the Swiss bank wanted its money back and the poor home owner was pursued by lawyers. At every stage, those who dreamed up the scheme managed to trouser shed loads of "commission" payments and, although, as Beachcomber says, they may have gone to ground, they did so with lots of money to tide them over the worst of the schrapnel that then flew around.

Lack of any effective oversight by regulatory authorities made this scam possible, with the perpetrators being far cleverer than any regulators. I don't know what regulatory scheme (if any) is now in place in Spain, but it should be a must for anyone thinking of equity release to examine all that stuff beforehand.

[katy]

Yes exactly how it was. Some schemes were even worse as they handed over 80% to dodgy financial advisors to invest. There was a TV programme and one couple (CDS) had lost £500,000. They won the case but years later never saw any money. Hope they finally did.

Read some of Beachcombers link and some of these Companies were even paying Lawyers to endorse their Equity schemes.

[Paddy Pumpkin]

These guys are doing bare ownership. Basically give them the house and you get a lifetime usufruct (right to use) on the property

https://www.spanishsolutions.net/blog/b ... roperties/

I am an investor and I looked at the idea....it wasn't a great deal for my fund, basically just a big bet that house prices go up. For the owner it wasn't too bad. In your 60s and you will get about 50% of the value of the property.

Caveat...I didn't dig the legals too much once I realised the investment wasn't so good an opportunity

[costakid]

These guys are doing bare ownership. Basically give them the house and you get a lifetime usufruct (right to use) on the property

https://www.spanishsolutions.net/blog/b ... roperties/

I am an investor and I looked at the idea....it wasn't a great deal for my fund, basically just a big bet that house prices go up. For the owner it wasn't too bad. In your 60s and you will get about 50% of the value of the property.

Caveat...I didn't dig the legals too much once I realised the investment wasn't so good an opportunity

Sounds a cr+p deal to me. You get 50% of the value up front and then die unexpectedly with in a year. Your kids are getting a terrible deal on your estate.

[Paddy Pumpkin]

And if you live 30 years you got a great deal....

If you take a house say worth 100k. You get 50k now and invest it at 3% for 30 years you will have 121k.
If you invest 50k at the average bank of England rate of last 20 years (crude average is 5%) then you will have 217k for the kids. Risk free and no maintenance costs for your house. Additionally the money can be outside Spain so not subject to Spanish inheritance tax.

Alternatively you can just enjoy the money and spend it as opposed to looking at 4 walls of your house and waiting to die living on lower income solely to fund their kids inheritance. BTW....not all of the world has kids.

Each to their own and if the OP wants to go down that route here they have an option nobody is forcing them.

[costakid]

And if you live 30 years you got a great deal....

If you take a house say worth 100k. You get 50k now and invest it at 3% for 30 years you will have 121k.
If you invest 50k at the average bank of England rate of last 20 years (crude average is 5%) then you will have 217k for the kids. Risk free and no maintenance costs for your house. Additionally the money can be outside Spain so not subject to Spanish inheritance tax.

Alternatively you can just enjoy the money and spend it as opposed to looking at 4 walls of your house and waiting to die living on lower income solely to fund their kids inheritance. BTW....not all of the world has kids.

Each to their own and if the OP wants to go down that route here they have an option nobody is forcing them.

Where can you get 5%? For the last 10 years in the UK the rate has been very poor and now its 0.01%

[Paddy Pumpkin]

i refered to the average rate over the last 20 years