Hello,

I hope this reply is not late now.

I understand that you want to pay the 20000 Euros mortgage as purchase price and as there is a minimum fiscal value that will be applied, you will pay high taxes when registering the ownership. Formalizing such contract entails taking the risk the owner does not deposit that amount against the mortgage payment after 5 years ( he could choose to use it to cover other expenses ). We recommend that if you decide to go ahead, a rent to buy agreement should be exceuted within 5-8 years that indicated the vendor/owner/landlord has the obligation to deposit those amounts for the mortgage repayment, that is, in the mortgage bank account, but a fixed purchase price must be set; if it is only 20.000 Euros and the Tax office sets a higher value for the property, you will have to pay taxes for the difference and then register the ownership.

That is, once the contract expires or at any time during that period ( after, 3, 4, 5 etc years ) you would have to go to the Notary and formalize the purchase, indicating a pruchase price of 20.000 €. The Tax office will ask you to pay for the corresponding tax deriving from the difference between that amount ands the taxable value they have given to the property. After that, the inscription can take place at the Land Registry.

We recommend to have a solicitor check this type of agreements in the interest of both parties. I take the opportunity to offer our legal services for that end, so please feel free to contact me directly by e-mail if you wish to discuss in detail ( click on my profile).

Regards,