Selling a second home and the reverse mortgage are the main alternatives of Spanish retirees to face an insufficient pension
Complementing retirement does not have to be linked to a pension plan. The uncertainty generated by the sustainability of the current public pension system is making the concept of housing emerge as a source of income. This alternative is increasingly attractive because it fits with the conception that many Spaniards have that a home ownership is life insurance. Proof of this is that, according to the V Study of Casktua.com, six out of 10 Spaniards over 65 consider their home as the best pension plan. To obtain profitability for this real estate property the main formulas are: reverse mortgage, rent, sale and sale of housing with usufruct reserve.
This alternative consists of receiving, usually monthly, an economic amount – previously agreed with the bank – until the death of the interested party, without losing ownership of the property until that time, when it becomes available to the bank. This route is exempt from taxation and is the second most popular option (28%) among those over 65, in case of liquidity problems.
Sale of housing with usufruct reserve
This type of sale would be a possibility for 17% of this population group. The so-called nuda sale allows the right of ownership of a property to be transmitted to the buyer, but the seller maintains the right of use for a certain period of time, which can be a few years or until his death.
Sale or rental of the second residence
Having a second home owned can become a constant source of income and can also provide an immediate injection of liquidity if the sale is used. This would be the first alternative the most veteran would choose if their pension was not enough to support themselves economically. Alongside the sale, 28% of respondents by Casaktua.com I would choose the rent with the aim of enjoying monthly fixed income.
Rental of the home while residing in another property or in a residence
In the case of people who need care, renting the usual home may be the best option. Whether the person resides in the home of a family member or is in a residence, this option allows the property of the beneficiary and his heirs to be maintained while receiving income to pay for this type of services.
Sale of habitual residence or rent of a room
These are two options for which 12% and 6% of these older respondents would opt, respectively. The sale of habitual housing is one of the most drastic choices, and it is only possible if there is another domicile, such as a residence or choosing to make the second home the main one to retire to beach or countryside areas. In case of opting for this route, people over 65 are not retained personal income tax for the sale of their home, which will contribute higher income than in a regular sale. Another option is to rent only part of the house. If it consists of several floors, you can transfer a whole or rent a room if you prefer to enjoy the company.
. (tagsToTranslate) Housing (t) Pensions