The purchase of a property in Mallorca is a process in which numerous details must be considered. In Spain and, of course, in the Balearic Islands, there are numerous bureaucratic hurdles to overcome from signing the option contract to the notary’s appointment. Without legal assistance, the purchase of real estate in Mallorca for foreign prospective buyers can hardly be accomplished. An independent lawyer (span .: Abogado) accompanies you through the whole process and is involved in the negotiations with the seller.
It is necessary to get the Spanish tax number NIE ‘’Numero de Identificación de Extranjeros’’ to be able to buy a property in Mallorca, take out a mortgage loan or buy a car. You can apply for the NIE tax number at the Oficina de Extranjería in Palma de Mallorca. To apply for the NIE number, the passport and two passport pictures are required.
After receiving the NIE number, you can open a bank account in Mallorca. In Spain it is customary to hand over the purchase price to the seller in the form of a check at the notary´s appointment.
You will continue to use this bank account later, for example, to pay the running costs and finca furnishings.
Real estate professionals know all the details that can bring buying a property in Mallorca. Before finding your perfect house and signing a contract, you must review the property.
You must inspect the house for moisture damage cause of humidity in Mallorca and check the condition of the electrical installations and water pipes. You also need to check available heating options, window, doors, and sanitary facilities.
If the dream property is found and the price is within the available budget, a reservation or option contract is concluded in the first step. A reservation contract makes sense if you are interested in buying the property, but the financing is still uncertain. The option contract is when for a deposit of 10 to 20 percent of the purchase price, the interested party gets the right to purchase the property within a defined period.
People who cannot or do not want to pay for a property in Mallorca in cash should take care of the financing at an early stage. Foreign homebuyers can get a loan in Spanish bank. Mortgages are issued for a maximum of 20 years. The complete repayment of the debt is compulsory during this period.
When buying and maintaining a property, the one-off tax is either the land transfer tax or the VAT. The amount of the former tax is between 8 and 11 percent and depends on the purchase price.
Once all the formalities have been completed, the property purchase on Mallorca will be sealed with a final notary appointment. In the presence of the buyer, seller, legal counsel of both contracting parties and a representative of the bank, if a mortgage has been taken, all contracts are signed. Only then can the entry in the land register be made.
It is so easy to obtain a cost break-down, as far as purchasing a property for sale in Mallorca these taxes are applicable:
• Notary fees and charges of the property register
• 10% VAT on the purchase of new properties, known as IVA
• ITP – Purchase Tax for purchase of not-new property
• 1.2% stamp duty which may occasionally arise known as AJD (Actos Jurídicos Documentados)
Address: Vía Roma, 5, prin. primero, 07012 Palma de Mallorca
Email: info@mallorca.law
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