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Mortgages in Mallorca for HNW and UHNW Individuals

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Posted by Krystian Matkiewicz on 29.11.2023
Private Property Mallorca Immobilien Mallorca, Real Estate Mallorca, Inmobiliaria Mallorca, Mallorca Magazin

Mortgages in Mallorca for HNW and UHNW Individuals

Many high-net-worth and ultra-high-net-worth individuals searching for peace and privacy choose to invest in real estate in Mallorca. This jewel of the Mediterranean has the infrastructure to allow these large fortunes to establish themselves and enjoy a higher quality of life than in a big city. The luxury real estate offer in Mallorca is extensive and includes a huge diversity of properties, ranging from modern villas with sea views to authentic townhouses and beautiful estates in the Tramuntana mountains, a UNESCO World Heritage Site.

At Private Property Mallorca we understand that each client is unique, which is why we actively collaborate with Lionsgate Capital, who are the leading mortgage brokers specialized in assisting high-net-worth and ultra-high-net-worth clients obtain the best financing solutions for their luxury property investments in the Balearic Islands. In this article in collaboration with Lionsgate Capital, we discuss key points about mortgages in Mallorca for HNW and UHNW individuals.

The Wealth Tax in the Balearic Islands

When investing in a luxury property in Mallorca, there are important aspects to consider, the main one being the Wealth Tax. In the Balearic Islands this tax affects all individuals, whether they are tax residents in Spain or not. Non-residents are entitled to an individual tax deduction of up to 700,000 euros per person after which Wealth Tax applies. It is calculated on each individual’s net assets on the 31st of December each year and ranges between 0.28% for net assets of less than 170,742 euros to 3.45% for those whose net assets are equal to or greater than 10,909,915 euros, and it must be paid every year!

The good news is that mortgages are deductible for Wealth Tax purposes. This is possible as long as the mortgage is in place at the time of purchase. For this reason, it makes sense for all buyers to finance, even if they have the funds available. We at Private Property Mallorca are proud to partner with experts in financing, such as Lionsgate Capital, who can help you understand the different options available and how you can maximize your return on investment.

Other advantages of mortgaging

Another good reason to finance the purchase of your property is to maintain liquidity. If you purchase the property with a mortgage in Mallorca, you can diversify your portfolio and continue to invest in other areas that generate higher returns. In addition, it is important to know that in Spain it is not common to release equity after the purchase of the property, therefore, to maintain liquidity and to make the most of the tax advantages, it makes sense to finance at the time of purchase. In the end, it is all about making the maths work in your favour!

Personalized financing solutions in Mallorca

Every client is different, and their personal situation, preferences and priorities must be carefully studied to obtain the best financial solution for each individual case. The financing options for HNW individuals are not limited to obtaining a traditional mortgage from banks in Spain. Lionsgate Capital have access to all the banks in Spain, private banks in other European jurisdictions and funds, enabling the team to offer bespoke financing solutions for each client and transaction, as well as preferential conditions for all their clients, including mortgages of up to 100% of the purchase price. The key is to contact the team of mortgage experts to study your case and help optimise your investment in the Balearic Islands.

Lionsgate Capital, your mortgage experts

Lionsgate Capital’s international team of mortgage experts is based in Mallorca, and together add up over 50 years of combined experience in the Spanish baking industry.  Specializing in assisting high-net-worth individuals of all nationalities and tax residences, they accompany clients through the whole mortgage process from first contact to completion, ensuring each mortgage is perfectly suited to each client’s needs.  Lionsgate Capital is a fully-registered mortgage brokerage company, and trust and discretion are an integral part of their work ethics.

We recommend that all clients interested in acquiring a property of over one million euros contact us and we will make sure to put them in touch with the right mortgage brokerage.

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