THE EQUITY RELEASE SCHEME


Through our contacts with a firm of Accountants in Marbella and the Landsbanki in Luxembourg we have set up an investment which is designed to negate Inheritance Tax but also offers the client an opportunity to release up to 25% of the capital tied up in their property.

1st Product

  • The Bank Valuation of the property must be above 350,000€.
  • The property must be fully paid for (the exception being if a client is using the Equity Release to pay off an existing mortgage).
  • The bank will loan the client up to 100% of the bank valuation of the property. Because a 100% charge is registered against the property in the Notary it negates the possibility of an Inheritance Tax liability.
  • When the Bank loans the client 100% they allow them to take up to 25% in cash, which is non-taxable & doesn't have to be declared on a tax return because it's a return on your own money.
  • The other 75% + goes into an Investment to pay for the total mortgage and should also provide the client with an additional annual income.
  • There is no restriction for age & no proof of income necessary.
  • Set Up Fees are usually around 3.5% and can be taken from the released equity.

Please note that if someone is able to afford to buy a property worth say 400,000€ for cash, they could do this investment & receive effectively an 86,000€ discount after the fees have been paid. Therefore the property will have only cost 314,000€ as well as having 300,000€ in an investment working for them.

Example 1

A 75 year old man owns a detached Villa valued at 650,000€ which is fully paid for and he would like to release some equity to support his pension.

Bank Valuation of Property
650,000€
The client can take up to 25% in cash
162,500€
Less fees 3.5%
22,750€
Cash to client
139,750€
75% to Investment
487,500€

For clients owning properties between 150,000€ & 350,000€ we have a second product with The Premier Group.

2nd Product

  • The Bank Valuation must be above 150,000€.
  • The property must be fully paid for.
  • There is a 1,000€ non refundable application fee which includes the Bank Valuation.
  • The bank will loan the client 100% of the bank valuation of the property. Because a 100% charge is registered against the property in the Notary it negates the possibility of Inheritance Tax liability.
  • When they loan the client 100% they allow them to take 5% in cash, which is non-taxable & doesn't have to be declared on a tax return because it's a return of your money.
  • The client can also take a 2% Annual Income from the loan for the next 4 years.
  • The other 95% (less fees) goes into an Investment to pay for the total mortgage.
  • The set up fees are 4% which can be taken from the mortgage.
  • There is no restriction for age & no proof of income necessary.

Example 2

A woman owns an Apartment valued at 180,000€ which is fully paid for and would like to protect it against Inheritance Tax. She would also like some money for a nice holiday.

Bank Valuation
180,000€
 
Cash to Client 5%
9,000€
 
95% to Investment
171,000€
 
2% Annual Income for 4 Years if required
3,600€

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