Lease-To-Own Purchase Or How To Profit From Spain's Market Downturn

[Patricia]

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,

[Vivaespaña]

Just wondered if thread still going
I rent a house at the moment and its from a very close friend
She would like to sell and I would like a rent to buy contract
What I am proposing is a substantial rent over 8 years and she takes this off the agreed price
Is this legal in Spain, or even doable ?
We would have agreement drawn up by a legal representitive and her current " right of attorney"
Any comments please

[Marta]

There would be no problem with what you are planning to do. It is completely legal.

The procedure is as follows: a normal rental contract is drafted, with the only difference being that you would add a clause stating that after a period of time, the tenant would be able to make use of the purchase option which the parties fix at a value of xxx amount (property value). All money paid during the life of the rental contract, as rent, will be deducted from this sale price. You would also need to state the conditions under which this sale would take place (who pays the expenses, etc.), as in any purchase. The owner will most probably add that, in the event of not proceeding with the purchase during the agreed time, all funds received as rental income will be kept by the landlord.

If you need any help drafting this document please don't hesitate to contact us.