Spanish mortgage as a self-employed buyer or company owner

Cases from this theme — by region

Mallorca: Costa Blanca: Gran Canaria: Canary Islands: Tenerife: Costa Brava: Costa de Valencia: Costa del Sol: Portugal: Anonymised individual case, not a binding statement for other projects · Siegfried Perini for the owner Olga Nikushkina · §34i GewO · no tax or legal advice · no financing commitment; conditions depend on creditworthiness, loan-to-value and bank

In short: Retained profits don't count — plan distributions early: The most common problem here: retained profits are not private income and do not count. If you intend to buy, plan distributions early.

Future rent from the financed property is not counted: Future rental income from the financed property is not used. Existing income from other properties is recognised, often only in part.

How do self-employed buyers finance a property in Spain? On demonstrated earning power rather than payslips — and with more lead time. Spanish lenders review several completed years and work from the taxed result, not from turnover.

Whatever was kept low in the accounts for tax reasons directly reduces the lending capacity here, which particularly affects owner-directors whose drawings and company profits are assessed separately. The customary lending ceiling for non-residents sits at around 70 per cent of the tasación, and fluctuating income tends to produce a discount rather than a refusal.

Preparation is what decides it: complete documentation, explained fluctuations and a plausible account of recent years. Anyone who starts assembling papers after signing the private contract loses exactly the time needed to find the right lender. The cases on this page show how differently income types are assessed, from freelancers to owner-directors with fluctuating drawings.

Self-employed: the bank sees your profit, not your turnover: Self-employed buyers and business owners are financed in Spain — routinely, and with no penalty for being self-employed. They fail on something else: which figure the bank accepts as income.

An employee submits three payslips and the case is clear. For a business owner, the Spanish bank examines annual accounts and tax assessments over several years and looks for a stable, recurring result. Not the best year. The reliable one.

Turnover — impresses nobody. It appears nowhere in the bank's calculation. Profit — this is the figure that counts. Declared and documented — from at least three sets of annual accounts. What stays in the company — does not count. Retained profits are not the shareholder's private income. Anyone who has deliberately drawn little for years to optimise tax appears before the bank with a low income.

Tax optimisation and creditworthiness pull in opposite directions. That is not a criticism of your accountant — it simply means that if you intend to buy in Spain within two years, distribution planning belongs on the table today.

The debt-service ratio of 30 to 35 per cent of net income applies here too. What is counted is your actual net — the declared profit minus taxes and social-security contributions; that is no different in Germany. And every commitment is added up — business loans, leases, guarantees and your mortgage at home included. And a common error: future rental income from the Spanish property is not counted. Existing rental income is recognised, often only in part.

Frequently asked questions