Buying property in Mallorca 10 years before retiring

mortirolo

Hi all!.......I'm an antipodean being living in London for the last 25 years married and with children who are finishing off GSCE & A levels I'm approaching retirement date of early 60's at the most basically 10 years left probably. I have virtually paid off my mortgage now 12 months to go! Luckily thanks to my grandfather who was born on the continent I have both Dual British and an EU passports and have just managed to get my children the same, wife in same position thanks to her Grandfather. So for me that is a relief as we want to retire in Mallorca, Spain with EU resident status access to full medical etc. Myself and my wife are tired of London now (it wears you down as most know!) and want to retire somewhere warm and we love outdoor life, 

So what I was thinking of doing is digging into my mortgage grabbing some cash and using this to buy a property in Mallorca (good portion of deposit) whilst we are still employed, ok that means a mortgage all over again well a 10 year max one is the plan! So what we are trying to do is get a 10 year at least head start on the property market in Mallorca, then in 10 years, retire in Mallorca, sell our London property use the profit to pay off the Mallorca property, some money to our kids and use whatever is left over with our private pension, savings and British government pension at 67 eventually (which I must admit and moan has to be the worst government pension in the western world! I feel sorry for all us Brits it really is pp compared to other Western countries. My brother to compare would get £500 more per month compared to me for state pension today.....anyway..............)

Mallorca and other Balearic islands seem the perfect healthy place to retire to us. I mean we could wait 10 years then sell and buy in Mallorca but as people might know Mallorca is probably the most expensive place in Spain outside Madrid & Barcelona. I would need to calculate everything of course but this is the plan anyway!  Comments or experiences would be great!

MovingForwards

What will the Mallorcan property do for 10 years?
Have you done any long holidays there to get a good feel for how it is throughout the year?
Do you speak Spanish or are you planning to stay in an ex-pat area?
Have you looked into taxes and having pensions paid over here then converted into Euro's?
Cost of living / bills, will that be covered on your pensions and savings?
How about repairs and replacements to the property and goods?
Are you looking at a flat / house in a complex or a house / flat in a village?

Have you done any research and joined ex-pat forums to get guidance, as you'll more likely get useful information from people who have done it where you're looking at moving to.

I did look into years ago, got books, read forums, looked at properties for sale, drove to walked round various areas to get a feel for it. Nothing came of it due to personal circumstances. It didn't stop me leaving England for somewhere nicer, which is what I wanted all along as the city I was born, raised and lived in all my life wasn't where I saw myself living the rest of my life.

Keep_pedalling

mortirolo said:

British government pension at 67 eventually (which I must admit and moan has to be the worst government pension in the western world! I feel sorry for all us Brits it really is pp compared to other Western countries. My brother to compare would get £500 more per month compared to me for state pension today.....anyway..............)

https://fullfact.org/online/pensions-countries-comparisons/?utm_source=content_page&utm_medium=related_content

Sunnylifeover50plan

When you say EU passports do you mean Spanish or somewhere else like Ireland?

I only ask as you might not be entitled to Spanish healthcare when you decide to move out there. At the moment, afaik, EU passport holders would still need to apply for residency if intending to reside in Spain longer than 3 months. Those living in the EU can do so with less fiscal means but still need to have private medical insurance in place when applying for each family member looking to become resident.

Whilst the Spanish have a central and local governmental structure as a rule of thumb the assumption would be that you would not be entitled to healthcare on the same basis as a Spanish national until after 5 years of temporary residency. Even then in my region of Spain use cases of people getting non contributory residency based healthcare from the state are impossible to find.

Instead people can pay into what's called the Convenio Especial after the first year at a current cost of 60 eur per person per month if under a certain age rising once that person is in the early 60's.

Under the terms of the WA if resident before of up-to this time the UK government has stated it will allow the export of the S1 at UK state retirement age which would allow for mostly free at point of use medical access.

So a Spanish citizen/ passport holder would likely be better placed than a French or Irish passport holder. Clearly a lot could change in 10 years.

Much of what else features in your plan depends on things mentioned above plus house prices in Majorca vs money invested elsewhere in different investment vehicles plus what value (family holidays, working remotely, rental) you might be able to extract from it versus the costs of doing so.

 

belfastgirl23

I’m presuming that it’s not just a pandemic pipe dream where you’ve never actually visited the area, but it’s something you’ve been thinking about for some time.  Leaving aside other issues, if you buy the property now and are in a position where you can afford it without too much strain, and if you can take decent holiday time, you get 10 more years to enjoy it if you buy sooner. No one is promised the future and if it’s something you really feel you want to do, why wait?

Another benefit is that you will have a chance to start spending more time there over the next 10 years and will know by the time you retire if you want to live there full time, part time, 50/50 etc. I have friends who decided to buy their retirement home early a few years ago after coming into some unexpected money. They’ve been able to spend around 10 weeks a year there at different times of the year and now are clear that they would probably want to base there 75-80% of the time in retirement. One of the things they are most grateful for is that their parents were also able to spend time there while their health was good enough - that wouldn’t be possible now. And they have even managed to work from there for large parts of the pandemic.

Of course there are a lot of practical issues to work out, however in the end if you decide you don’t want to live there when you retire you can sell up or rent out. I’m not saying it’s zero risk but then again nothing is. 

missile

mortirolo said:

Hi all!.......I'm an antipodean being living in London for the last 25 years married and with children who are finishing off GSCE & A levels I'm approaching retirement date of early 60's at the most basically 10 years left probably. I have virtually paid off my mortgage now 12 months to go! Luckily thanks to my grandfather who was born on the continent I have both Dual British and an EU passports and have just managed to get my children the same, wife in same position thanks to her Grandfather. So for me that is a relief as we want to retire in Mallorca, Spain with EU resident status access to full medical etc. Myself and my wife are tired of London now (it wears you down as most know!) and want to retire somewhere warm and we love outdoor life, 

So what I was thinking of doing is digging into my mortgage grabbing some cash and using this to buy a property in Mallorca (good portion of deposit) whilst we are still employed, ok that means a mortgage all over again well a 10 year max one is the plan! So what we are trying to do is get a 10 year at least head start on the property market in Mallorca, then in 10 years, retire in Mallorca, sell our London property use the profit to pay off the Mallorca property, some money to our kids and use whatever is left over with our private pension, savings and British government pension at 67 eventually (which I must admit and moan has to be the worst government pension in the western world! I feel sorry for all us Brits it really is pp compared to other Western countries. My brother to compare would get £500 more per month compared to me for state pension today.....anyway..............)

Mallorca and other Balearic islands seem the perfect healthy place to retire to us. I mean we could wait 10 years then sell and buy in Mallorca but as people might know Mallorca is probably the most expensive place in Spain outside Madrid & Barcelona. I would need to calculate everything of course but this is the plan anyway!  Comments or experiences would be great!

This dreamer has another post:

Currently I have 35% deposit and HBSC (my only quote so far), HSBC have given me 4.75 x my salary. Does anyone know of a lender who will offer 5 x salary or more! I have a good deposit but I'm after another 50-70k in London. Who shall I try! Or is 4.75% the max for 1st time buyer.

p00hsticks

From personal experience, the only time I'd say do it is if you know the area, have set your heart on a specific property and it happens to come up for sale, or if you're prepared to just hand it over to someone to rent out until you  are ready to move into it.

We did it, although in the UK.

We'd been holidaying regularly in the same place in the UK, had agreed that we'd retire there is a few years time. Looking to book our holiday one year, we noticed that one of the houses near where we stayed was up for sale as the old lady who lived in it had died. Knowing it was a case of 'dead mans boots', we went ahead and bought it, even though we knoew it would be years before we'd get to live in it fulltime. We've now retired and live there permanently, but the years after we bought  it weren't particularly pleasant, as we had to spend a long weekend every month or so checking the property was still alright. It used up all my holiday from work and involved some nasty journeys in the middle of winter.

Clowance

Isn't Mallorca and the rest of the Balearic islands much more expensive than mainland Spain? Would that be a risk factor?

Zanderman

missile said:

mortirolo said:

Hi all!.......I'm an antipodean being living in London for the last 25 years married and with children who are finishing off GSCE & A levels I'm approaching retirement date of early 60's at the most basically 10 years left probably. I have virtually paid off my mortgage now 12 months to go! Luckily thanks to my grandfather who was born on the continent I have both Dual British and an EU passports and have just managed to get my children the same, wife in same position thanks to her Grandfather. So for me that is a relief as we want to retire in Mallorca, Spain with EU resident status access to full medical etc. Myself and my wife are tired of London now (it wears you down as most know!) and want to retire somewhere warm and we love outdoor life, 

So what I was thinking of doing is digging into my mortgage grabbing some cash and using this to buy a property in Mallorca (good portion of deposit) whilst we are still employed, ok that means a mortgage all over again well a 10 year max one is the plan! So what we are trying to do is get a 10 year at least head start on the property market in Mallorca, then in 10 years, retire in Mallorca, sell our London property use the profit to pay off the Mallorca property, some money to our kids and use whatever is left over with our private pension, savings and British government pension at 67 eventually (which I must admit and moan has to be the worst government pension in the western world! I feel sorry for all us Brits it really is pp compared to other Western countries. My brother to compare would get £500 more per month compared to me for state pension today.....anyway..............)

Mallorca and other Balearic islands seem the perfect healthy place to retire to us. I mean we could wait 10 years then sell and buy in Mallorca but as people might know Mallorca is probably the most expensive place in Spain outside Madrid & Barcelona. I would need to calculate everything of course but this is the plan anyway!  Comments or experiences would be great!

This dreamer has another post:

Currently I have 35% deposit and HBSC (my only quote so far), HSBC have given me 4.75 x my salary. Does anyone know of a lender who will offer 5 x salary or more! I have a good deposit but I'm after another 50-70k in London. Who shall I try! Or is 4.75% the max for 1st time buyer.

The second post you quote is 8 years old....

missile

Zanderman said:

The second post you quote is 8 years old....

Correct, and .........

TELLIT01

and..... the poster may be in a very different financial position now.