Real Estate Leasing

Real Estate Leasing is a financing solution for the purchase and / or construction of real estate, whose simplicity and speed of procedure, among other advantages, attracts more and more interested parties.

This solution allows the customer (the lessee) to enjoy a property for a certain period of time, against payment to the owner (the lessor) of an income. The customer has the option to purchase the property at the end of the contract and against payment of the pre-established residual value.

It is a medium and long-term financing that is not restricted only to properties intended for housing, but can also be used in the acquisition of stores, offices, clinics, hotels, warehouses, industrial facilities, etc.

A Real Estate Leasing contract has multiple advantages, including flexibility in financing conditions, and is usually characterized by:

  • A term (for companies the term can vary between 5 to 15 years),
  • An initial entry (20% is usual)
  • A residual value (usual values between 2% to 10%).

The advantages of Real Estate Leasing are several:

Tax advantages

  • Tax deduction of financial charges with interest included in the property's income;
  • Depreciation of assets under financial leasing up to the legal limits defined;
  • Exemption from payment of IMT in the eventual transfer of the property, at the end of the contract, to the definitive owner.

Another advantages

  • Absence of Stamp Duty related to interest and expenses with credit opening;
  • Payment of part of the financing (residual value) at the end of the contract;
  • Less costs: Real Estate Leasing does not require a mortgage associated with the operation, since the property remains the property of the Bank until the payment of the residual value.
  • Possibility of including the value of the IMT and other expenses associated with the contract / records in the global financing of the Leasing, if the property evaluation includes this margin;
  • Option, during the contractual period, to assign the contractual position to third parties;
  • Possibility of subleasing the property (leasing the property to a third party, remaining as a lessee);
  • The rents to be settled can be of the anticipated, posterized, variable, monthly, quarterly or half-yearly type;
  • It is compatible with state incentive systems, as well as community incentives.

Conditions for access to a Real Estate Leasing

There are real estate leases for individuals and companies, although not all financial entities that practice this type of credit serve both markets. The financing conditions, as well as the type and value of the guarantees required, may differ depending on whether it is a private customer or a company.

A Real Estate Leasing agreement can finance the acquisition of properties already built and, or improvement or adaptation works, as well as the purchase of land and the respective construction of the property.

How much?

The Annual Nominal Rate ( TAE ) is calculated based on the Euribor rate plus the spread value, which can reach high values between 5% and 10%, due to the fact that Euribor rates are historically low. As an example: That is, considering a hypothetical rate of 10% of 9.875%, for a credit of 350,000 Euros over 120 months, initial entry of 20% and residual value of 2% and LTV of 80%, including

To the sum of the paid rents and the residual value, there are usually administrative expenses such as Dossier Commission, Income Processing Commission, Contract Management Commission, Early Redemption Commission, Contract Termination Commission , End of Contract Commission, etc.

Guarantees required

When it comes to companies, a promissory note is usually requested by the Company with the endorsement of the partners and spouses. It is clear that the guarantees required may be different depending on the credit risk analysis.

Who provides Real Estate Leasing

Banks are the main financial entities to offer this type of product. Here are some links:

 
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