morgages

Do you have a query on how to get things done in Andalucia, where to find things, who to call? Find out by posting and hear about others experiences.
pegasus
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morgages

Postby pegasus » Fri Sep 15, 2006 1:18 pm

hi every one, looking to move to spain with my family soon.we are looking to run a b-b how easy is it to get a spanish mortgage if the place we buy is already up and going as a b-b so as that will be main income.
any info would be great thanks

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claire4james
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Postby claire4james » Fri Sep 15, 2006 3:50 pm

Good question and one I am shortly to be asking myself.

I have been told by some people that within reason, anything is possible. I have heard that it is possible to get overpriced bank valuations on properties so that mortgages of 100 even 110% can be achieved.

Anyone elses thoughts will be good....
from La Cala with love...........

katy
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Postby katy » Fri Sep 15, 2006 3:54 pm

A friend has got a 110% mortgage and it was completed in a few weeks. I would really go through the small print though.

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Babby
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Postby Babby » Fri Sep 15, 2006 4:05 pm

We know of a couple who bought a big place, set up a B and B, had a mortgage - ended up running back to the UK leaving debts behind. All happened within 12 months.
I used to be indecisive but now I´m not so sure.

Valencia_Paul
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Postby Valencia_Paul » Fri Sep 15, 2006 4:08 pm

I have heard advice to never try to use a B&B as your main or only income. They can be nice little top-up earners to supplement other activities but you will probably never get a high occupancy right through the year.

katy
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Postby katy » Fri Sep 15, 2006 4:23 pm

I agree, there is so much competition now, it seems as if everyone on those TV programmes want to do it, and the authorities are clamping down on the unlicensed ones, they are much keener than with apartment rentals.

pegasus
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mortgages

Postby pegasus » Sat Sep 16, 2006 10:41 am

thanks to all that replyed, please any more info would be great :D

campo babe
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Postby campo babe » Sat Sep 16, 2006 12:06 pm

It would be interesting to know how much a licence would cost to run a bed and breakfast in Spain. Does anyone have any figures? I expect it varies from town hall to town hall.

Do you have to have an opening licence like for a business i.e. shop?

Do you pay an annual amount or a one off payment?

I tend to agree with Valencia_Paul and Babby that it would be difficult to make a living from a bed and breakfast without some other form of income, and also the other costs involved in running a business in Spain need to be looked into. Certainly taking out a large mortgage to finance it might not be the best idea.

Let us know how you get on.

pegasus
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licence

Postby pegasus » Sat Sep 16, 2006 2:12 pm

thanks for your replies,yes i think i will look for a job as well to supplement the b-b,does anyone know about relevant licenses-costs etc, is it poss to just have people stay without telling the authorities, Ive rented a room out in the UK like this before.

El Cid
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Postby El Cid » Sat Sep 16, 2006 2:33 pm

There is a big clamp down on unregistered letting with some very large fines.

There is an article in this weeks Sur in English here

http://tinyurl.com/og5yp

Sid

pegasus
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just read

Postby pegasus » Sat Sep 16, 2006 4:21 pm

hi just read the article, its not worth the risk of getting cought will definitely pursue the legal route, has any one any info on the licenses thanks

Bongtrees
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Postby Bongtrees » Sat Sep 16, 2006 7:53 pm

Originally Pegasus was considering buying an establish B&B hoping to purchase with a mortgage.

I would imagine the B&B would have the required license and accounts to prove income to service a mortgage. The cost of a license will be insignificant compared with the daunting task of servicing a mortgage and paying the overheads and running costs.

When making a business plan for a B&B (established or not) and if you say you want to be legal dont forget that monthly autonomos of around 240 euros will have to be paid, irrespective of income or not. Life insurance cover plus business insurance also need to be factored in.

I have never seen a mortgage protection insurance and for autonomos there is no sick pay or benefits. There is no money in that type of business in Spain which is why so many are working on the black.
Hacienda are now recruiting more tax inspectors to trawl Internet and expat press to catch offenders on all the costas not just the CDS.

sueb
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Postby sueb » Sun Sep 17, 2006 1:52 pm

i must agree with everything that has been posted here. I have a friend who runs a b&b, it is definately not a full time/income business, however if you are well placed, good tourist area you could try doing what my friend has done. Networking.. making contact and freinds with local hotel managers/receptionists. when the hotels are fully booked they recommend the B&B. dont just leave it to chance, get out there and make yourself known. good luck with mortgage and business.
sueb

pegasus
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networking

Postby pegasus » Sun Sep 17, 2006 3:17 pm

thanks it is something i was going to look into, we are thinking of buying 5mins from lake iznajar any thoughts on this.

Beachcomber
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Postby Beachcomber » Sun Sep 17, 2006 4:34 pm

Check out the post from Hillybilly in this thread:

http://www.andalucia.com/forums/viewtopic.php?t=8632

anyroads
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Postby anyroads » Sun Sep 17, 2006 10:15 pm

Another slant on mortgages..

Having a choice, is it best to have some kind of mortgage ?.

I believe you can offset a mortgage against an annual tax on property in Spain. Is this true ?


anyroads

El Cid
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Postby El Cid » Sun Sep 17, 2006 11:04 pm

anyroads wrote: I believe you can offset a mortgage against an annual tax on property in Spain. Is this true ?
I am not sure what you mean by "annual tax on property". If you mean the non residents imputed income tax then, no, you cannot claim mortgage costs.

Residents can claim mortgage payments against their income tax assuming that they relate to the purchase of their permanent home.

If you are running a B&B as a business there may well be similar allowances.

Sid

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dido72
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B&B

Postby dido72 » Mon Sep 18, 2006 11:14 am

My husband and I were also thinking of buying a property on a mortgage and running it as a B&B but i'm having doubts reading all this.

Neither of us has any particular skills or training or much Spanish to get a job to supplement our income and we thought a B&B would be the perfect solution to be able to "live our dream".

Does this mean it may not be possible to come to Spain after all?

Diana :cry:

anyroads
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Postby anyroads » Mon Sep 18, 2006 8:59 pm

Thanks Sid,

I supose it is that tax, i.e on non residents, but I was led to believe it was a property tax (as opposed to income tax) and that having some mortgage you could offset some of the charge.

Does anyone know what rate is charged for non residents property ?


Anyroads

El Cid
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Postby El Cid » Mon Sep 18, 2006 11:58 pm

anyroads wrote: Does anyone know what rate is charged for non residents property ?
The Non Residents "Income Tax" is charged at a flat rate of 25% of the notional rental value of the properety.

This is based on 2% of the catastral value of the property.

So, if your catastral value is 100,000 then 2% is 2000 and 25% is 500 euros tax.

There are no allowances for expenses such as a mortgage.

Sid


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