Operations to obtain liquidity with real estate assets will skyrocket this year

During 2023, 30% more operations were formalized in Spain than the previous year to obtain liquidity with real estate assets. The bare property sales, sales with guaranteed rent and reverse mortgages, in this order, were the operations most frequently carried out with the intermediation of MAS VIDA.

This is a formula that allows people over 65 years of age to sell their primary home in exchange for a single payment or a lifetime annuity, maintaining the right to continue using the home for life. Or obtain a loan, backed by the home, which will only have to be returned once the applicant dies.

And all these operations have an interesting tax treatment: they are exempt from the payment of capital increases to the Treasury.

Spain, below other countries in liquidity operations with real estate assets

In any case, and although this way of supplementing pensions is growing a lot, the figures in Spain are still very low compared to those in other countries where there is more tradition of liquidating real estate assets upon reaching retirement. .

In the United States, for example, 1.3 million households had used the reverse mortgage mechanism during the past year with an average amount of $90.000 according to the National Reverse Morgage. And in France, the United Kingdom and Italy, operations are carried out for an amount of around 4.000 million euros per year.

For this reason, this type of operations will continue to grow very strongly this year in Spain, since those over 65 years of age face a problem in our country: with a half board of €1.200 and high inflation, many people cannot meet their expenses.

80% of retirees in Spain own a home

However, 80% of retirees have real estate assets that they can liquidate without losing the use or ownership of their homes. Why not enjoy in life the savings in bricks generated during a lifetime of work?

According to data from MAS VIDA, the seller of a bare property apartment can obtain between 50% or 85% of the appraised value of your home, depending on your age. Thus, for example, a 70-year-old person could receive approximately up to 70% of the value of their home, while they would receive 85% if they were 95 years old.

Another option to supplement retirement income without losing ownership or use of the home is to apply for a reverse mortgageAccording to the data from General Council of Notaries, during the first half of 2023, 35% more reverse mortgages have been requested than in 2022, although the figures are still low because only 323 operations were formalized during the first half throughout Spain.

Operations to obtain liquidity with real estate assets will skyrocket this year

However, according to estimates by MAS VIDA, both bare ownership sales and sales with guaranteed rent and reverse mortgages are going to experience significant growth in 2024. This type of operation is expected to skyrocket this year 2024.

In Spain there are currently just over 9 million pensioners (4,6 million men and 4,4 million women) and according to data from the INE, 85% of those over 65 years of age own a home. Unfortunately, many of these people are “brick rich but income poor.”

Thus, with the low average retirement pensions in our country and the increase in the cost of living, all the circumstances are in place for operations to obtain liquidity with real estate assets to skyrocket this year.