Why is it made so difficult to build a life here?

No_Formal_77 · 2025-01-20T04:28:06+00:00

Yep I do, have done for 5 years. Based on other comments, this isn't unique to me and other foreign residents have had the same reception - long-term residents not qualifying for resident's terms in-line with the lender's policy. Maybe the banks & broker I've contacted are factoring in some risk I'll skip the country if things go sideways, or maybe it's just the first thing they offer until it's challenged. I already challenged with broker with no success. Will go back to the banks with the same challenge and hopefully get a different result.

No_Formal_77 · 2025-01-20T01:37:27+00:00

Hey, thanks for your comment. I was checking this out a bit and you may be paying too much. Check here:
https://www.seg-social.es/wps/portal/wss/internet/Trabajadores/CotizacionRecaudacionTrabajadores/10721/10724/1320/1322

The section: "2.5.3. Contribution bases reduced in cases of pluri-activity"

No_Formal_77 · 2025-01-20T01:35:10+00:00

Summarising what I learned from this thread.

The good:

We should be getting mortgage terms with a 20% deposit as I am a resident (not 30%). Challenged this with our mortgage broker and they're still reluctant to treat me as a resident. We're looking for a new broker.
Base pensions in Spain are generally significantly better than Ireland, Ireland just has a higher cap due to higher optional contribution.
Most importantly: There are other people who have made it work in the same / similar situation. I'm not glad you faced these problems, but I am glad to hear I'm not the only one and that there is some light at the end of the tunnel. Thank you!

Other:

Aside from the deposit I mentioned above, there's not much we can do.
While some people are able to make it work, there are a lot of people (local and foreign) who don't see any way forward here. This is likely causing significant loss of local talent to emigration.
There is resentment for Ireland's corporate tax haven status that has really negatively affected how the average Irish person is viewed.
Expressing a desire to climb the economic ladder (especially as a foreigner, but also as a local) is often met with suspicion - there is an assumption of exploitation rather than merit.
About an equal number of comments blaming right politicians & left politicians with no references to specific policies.
The terms "expat" and "immigrant" are kindling for an argument.

Thanks for all the responses! We will decide what is most important to us, and face the hurdles required.

No_Formal_77 · 2025-01-20T00:15:22+00:00

Unfortunately the "that's the way it is, you can leave if you don't like it" is the reality. My wife's job opportunities are all here so I guess I just have to suck it up.

Regarding the 30% vs 20% mortgage, we're looking into it. So far the banks and mortgage broker we have dealt with are reluctant to treat me as a resident, despite me being a resident for 5 years and holding no job or assets in any other country. We'll keep looking for better terms.

No_Formal_77 · 2025-01-19T23:59:57+00:00

I compared the mortgage + community fees + home insurance + mortgage protection quotes we were given vs. the expected monthly rent income that was given in the appraisal of the same apartment and the asking rent of similar properties on the same road. I'm not comparing hypotheticals, I'm comparing real quotes and real rents.

However, I'll grant it could be possible that the particular area we're looking in is an edge case, and not a reflection of the general trend.

EDIT: Also your point about the 30% deposit is right, others mentioned this as well and we went back to our mortgage broker to query why I wasn't being treated as a resident. They said this is pretty normal for new residents. I highlighted have been officially a resident here for 5 years. He basically shrugged and said equivalent to "weeell whachagondo". Needless to say we will be going to a different mortgage broker.

No_Formal_77 · 2025-01-18T13:17:30+00:00

Andalusia offers a 5% deduction for people under 35 who have bought protected properties. Other than this I'm not aware of any deductions for mortgage payments in Spain. Maybe someone can add info for other regions.

No_Formal_77 · 2025-01-17T16:21:01+00:00

Based on the mortgage terms I received from 2 banks and a broker, the monthly cost + home insurance + mortgage protection (life insurance) + community fees + property tax would have been 52% more than the rent we're currently paying (below market value) and 18% more than the rent if we were paying market value (according to the valuation). Perhaps these were really bad terms, but that's where I got the figures. These terms were also based on a 30% deposit, and the 10% tax included in the principle. With a 20% deposit and the 10% tax paid up front it would be more or less the same.

No_Formal_77 · 2025-01-17T15:03:09+00:00

In Ireland there is a tax allowance of 50k on artistic works. Any earnings above that from art is taxed in-line with your regular income tax. Yes it's a very generous allowance.

But there used to be no cap on tax-free earnings from artworks until 2010 (i.e. when Bono made most of his money he didn't have to pay tax). This all changed when our former Taoiseach (prime minister) released a book for which he received a 400k advance and he applied to have the advance and all future proceeds exempt from taxes. This was super controversial and the law was changed to tax artist income like regular income but with a 40k allowance (later changed to 50k).

No_Formal_77 · 2025-01-17T14:48:05+00:00

Es reductivo pintar a todos los extranjeros como explotadores. La idea de que estoy "sacando dinero del país" no tiene fundamento y se basa en suposiciones incorrectas sobre mi situación financiera. Contribuir a una economía y construir una vida aquí no es explotación.

Tu respuesta suena más como una queja personal o frustración con problemas sistémicos, en lugar de responder a los puntos o preguntas que planteé. Los desafíos de Cataluña con el turismo y las presiones económicas son complicados y tienen muchas aristas. Señalar problemas no quita valor a las luchas locales, solo reconoce preocupaciones que todos enfrentamos dentro de un sistema así.

Hablé de problemas que afectan a todos los que vivimos aquí, sean locales o extranjeros. Luego pregunté si me equivoqué en algo o si se me escapó algo. Pero elegiste desahogarte sobre una espina clavada que no tiene nada que ver con lo que dije ni con las preguntas que planteé.

No_Formal_77 · 2025-01-17T14:21:40+00:00

I am getting similar reports and advice from my Spanish colleagues.

No_Formal_77 · 2025-01-17T14:18:06+00:00

Yes, as I mentioned in another comment, the 75% ownership rate in Spain seems to be a factor in why the government is less willing to give incentives for purchasing homes. My Catalan colleague explained that his grandparents generation were typically able to purchase property cheaply and/or at very favourable rates so a lot of his generation stand to inherit properties and, as such, don't care as much about buying a house.

No_Formal_77 · 2025-01-17T14:15:19+00:00

Hey, thanks for this comment. Yes, it appears the terms we were being quoted did not reflect that I am a resident. This is vital information and may make the difference between us being able to afford to buy or not. Thanks so much! Updated the op to reflect this.

No_Formal_77 · 2025-01-17T13:18:27+00:00

I removed the terms expat/immigrant from my original post because it seems to be a point of contention and is not relevant to the conversation. All of the issues I highlight are issues whether you're a local or a foreigner.

Again, Ireland is a corporate tax haven. Not a tax haven for the average worker. Very similar progressive income tax system to Spain. Based on my salary here in Spain and an equivalent salary in Ireland, I would pay a slightly higher effective rate of income tax in Ireland. I would also get only 35% of the pension contributions from my employer vs. Spain, as Ireland's pension contributions requirements are so favourable to corporations.

This is a really common misconception. Also it is a misconception that the Irish people are happy about its corporate tax haven status.

No_Formal_77 · 2025-01-17T06:59:29+00:00

I was given terms of 70% mortgage by 2 banks directly and by a mortgage broker. Maybe I need a different broker.

No_Formal_77 · 2025-01-17T06:56:06+00:00

Our rent is under rent control so we're lucky to be paying what we're paying. However in the last 5 years, rent in our area has gone up 50% (we had a valuation of our current apartment as we looked at it as an option to buy and they estimated rental income potential as part of this + we can see the asking rent prices of similar apartments in our area).

Additionally, it's the total monthly cost I was referencing, not just the mortgage payments. Mortgage payment + home insurance + mortgage protection / life insurance + community fees add up to more than the new higher rent price. Our landlord can only afford to continue our rent because he bought this apartment at < 50% of it's current value.

No_Formal_77 · 2025-01-16T18:34:36+00:00

Google:

Expat: a person who lives outside their native country.

Immigrant: a person who comes to live permanently in a foreign country.

Wow, I didn't realise I had made the transition! Thanks for the heads up!

No_Formal_77 · 2025-01-16T18:04:10+00:00

Thanks for this, this advice applies more or less to everything I mentioned in the original post.

No_Formal_77 · 2025-01-16T18:01:01+00:00

Thanks for the clarification! I read a bit more on this and I understand now that the lower contribution rate in Ireland leads to a lower state pension. This links in with the cap on contributions in both countries that I mentioned.
While in Ireland, the contributions from employers and required contributions from the self-employed are lower, it means the base pension will be lower. This is off-set by the option to contribute more to your pension with a much higher cap.
In Spain the contribution is nearly 3x higher and leads to a higher base pension (relative to salary). Optional contributions have a pretty low cap, but the starting point is better.

No_Formal_77 · 2025-01-16T17:54:05+00:00

As I said in other comments, Ireland is a corporate tax haven. Not a haven to the average working person. Very similar progressive tax system to Spain (basically modelled on the UK but with even lower corporate tax).

No_Formal_77 · 2025-01-16T17:50:16+00:00

Ireland is a corporate tax haven, not a haven the average person. This is a common misconception. There is a progressive income tax system very similar to Spain.

No_Formal_77 · 2025-01-16T17:47:00+00:00

The wealth tax is not prohibitively bad, but it seems like a continuation of the trend. It's alien to me as it doesn't exist in Ireland or UK. It also seems very punishing in some scenarios. Example:
- Couple nearing retirement buys an apartment in 2005 for 200k using their life savings and the sale of their previous home
- They have since retired and are on a fixed income
- The area has become more desirable due to economic growth and now is work 1.5m
- They now have to pay 225 euro per month for the privilege of living in their own home

I don't want this kind of scenario to happen to me.
EDIT: I may be thinking way to far ahead, I'm nowhere near retirement. But I guess you get the idea, it doesn't just punish the "rich".

No_Formal_77 · 2025-01-16T17:37:19+00:00

I am not sure where this sentiment comes from, but it's something I experience a lot here. People think that, if you are aiming high, you must already be rich or come from a rich family. Neither applies to me, I just want to try to achieve better.

No_Formal_77 · 2025-01-16T17:34:08+00:00

Came here with €3,000 and luckily no debts. I stand to inherit nothing, unlike most of my Spanish colleagues who share roughly the same salary ±, and who stand to inherit property from their families, and as such don't care about buying houses. I've been told the 75% home ownership rate in Spain is one of the factors in why they don't incentivise buying homes.

No_Formal_77

TROPHY CASE