Sale and Lease Back
What is a Sale and Lease Back?
A Sale & Leaseback transaction provides an opportunity to access substantial liquidity upon its completion. As part of this arrangement, the seller is relieved of the responsibility to cover owner-related expenses such as community fees, property tax (IBI), and property related expenses. Moreover, this arrangement offers significant tax benefits, particularly for individuals over 65 years old, as they are exempt from capital gains taxation when selling their primary residence.
What exactly is a Sale And Lease Back?
It’s an equity release option that enables property owners to sell their property, receive the proceeds from the sale, and at the same time continue to occupy it as a tenant for an agreed-upon duration.
- Sale & Lease Back property transactions are carried out with investors who seek to obtain rental income from the property.
- The seller benefits from receiving a substantial amount of money, typically ranging from 70% to 100% of the property value, while the buyer benefits from earning a return on their investment through an annual rental price typically ranging from 3.5% to 5% of the purchase price.
When considering a Sale and Lease Back transaction, it’s crucial to acknowledge that while a substantial amount is received upfront, there is a need to effectively manage these funds to cover rental payments. Sale and Lease Back arrangements are typically chosen in the following situations:
- When the seller is advanced in age and desires to maximize the proceeds from the property.
- When there is a significant debt that cannot be resolved through alternative means.
- For a secondary property intended for temporary enjoyment, rather than lifelong ownership.
Discover the possibilities of Sale and Lease Back with Optima Mayores. Our expert team is here to guide you through every step of the process, ensuring you find the perfect investor for your unique situation. Trust us to provide comprehensive advice on the legal, financial, and tax implications of entering into a sale and leaseback transaction. Maximize your potential and secure your financial future with Optima Mayores.