Property Lawyer in Mallorca
Real Estate Solicitor.
The process of buying a property in Mallorca.
Find here the necessary steps to buy your new property in Mallorca.Before reading on, let me tell you that I will be happy to help you in the process of buying your new property in Mallorca.
I am part of a team specialising in foreign investment, transfer of properties, NIE number application, tax advice, verification of charges and liens on property and legal estatus of the properties on the market.
Rustic or urban. Big town or small village. With only 3.640 sq Km Mallorca has so many possibilities and despite the fact in one hour driving o will be able to cross the island from not to the other side, the location of your new property, will determinate your way of live there.
TIP NUMBER 1. Don’t be in a hurry. Surely the seller or Real Estate Agent will assure you that there is another person interested in acquiring the same property. They will want you to believe that either you buy it immediately, or you lose the house of your dream. Don’t play that game and don’t sign any papers until you’re 100% sure it’s the property of your dreams.
Although it may be hard to believe, in Mallorca you can buy a property by signing the deed before the Public Notary, you can register it in the Land Registry and Cadastre and still be an illegal property. Don’t let the seller or the Real Estate Agent (which works for the seller) guarantee you the legality. In the event that everything is not all right, the seller will not tell you and if the seller wants to hide something from you he will also hide it from the real estate agency.
Legality isn’t the only thing you need to worry about. The property you are going to buy must be free of debts such as mortgages, pending payments to the community of owners, urbanization payments or other debts that may encumber the property. On the other hand it is necessary to verify that it is up to date in the payment of rates and taxes.
TIP NUMBER 2. Hire a Lawyer. A Real Estate specialist. Being sure you buy what you are looking for (and not what vendor what to sell) will save you a lot of trouble on the future.
Once you’re sure you want it, make sure the seller knows you’ve decided on his/her property. Your offer will be the starting point of the negotiation and it is very important that you define: the price, when you want to sign the deed and those things that are indispensable for your offer to continue standing. For example, make it clear that the offer is subject to the property being legal, being free of charges and being given the documentation that proves that it really is so.
The option contract is not mandatory, so this step can be skipped and go directly to the signing of the public deed. Even so, in most cases an option contract is signed and a period, normally two months, is left between this and the signing of the purchase deed. During this time the buyer can prepare the funds if he does not have them or manage a mortgage. On the other hand, the seller will be able to prepare the required documentation, lift the charges and if necessary empty the property in order to deliver it to the new owner.
The clauses of this contract are binding on both parties and therefore it is important that all conditions of the future purchase are negotiated and included here.
The seller, when signing, pays the option premium which is normally 10% of the purchase price. As this contract is binding, it is a penalty for those who fail to comply with it. If the one who does not comply is the seller must return the duplicate option premium. That is double of 10%.
If the defaulting party is the buyer, the option premium will remain in the hands of the seller.
Both parties therefore risk the same.
TIP NUMBER 3. Leave a clause that allows you to terminate the Option Contract in the event that between the signing of the Option and the signing of the Purchase Deed you discover any illegality in the property.
Purchase deed has to be signed in front of a Public Notary. Notary will make the deed in Spanish and will translate it to you.
From the moment you sign the deed you have 30 days to pay taxes.
It is not obligatory but highly recommended. The Land Registry is the one that protects you from third parties. It is public. No one can buy the property registered in your name without your consent.
As a new owner you will pay Land Tax, Garbage Tax, Non Residents Tax (model 210) and in case your assets in Spain will be over 700.000 you will also pay Wealth Tax.
Tax Implications Of Buying Property In Mallorca (Majorca)
Before you make an offer to buy a property in Mallorca it’s advisable to make a tax plan, not only to know what you will pay when you buy a property but also to foresee the taxes you will pay in the future.
The taxes will depend on whether it is a new property or if it is used one. If you buy a new property, or one that has been completely renovated, i.e. when the seller is a promoter you will pay 10% IVA, Value Added Tax on the day of purchase. Subsequently, within 30 days of signing the deed of purchase, you must pay 1.2% of “Actos Jurídicos Documentados” Spanish Stamp Duty Tax.
On the other hand, if the seller is a private who sells a used property, you will pay the Transfer Tax “Impuesto de Transmisiones Patrimoniales, ITP“. This tax, which must be paid within 30 days of purchase, is progressive:
For the first step of 1 euro up to 400,000 euros 8% is paid.
For the second step of 400,001 euros up to 600,000 euros, you pay 9%.
For the third step from 600,001 euros to 1,000,000 euros you pay 10%.
And for the fourth step, which is all that exceeds one million euros, 11% is paid.
.-IBI. “Impuesto de Bienes Inmuebles” This tax is paid annually to the Town Hall where the property is located. .-Garbage Collection Rate. It is also collected by the Town Hall. .-Incinerator Rate: Many municipalities collect it in conjunction with the garbage tax
This tax (model 210) must be presented yearly, accruing on December 31st. You will liquidate the incomes of the property. i.e. rentals. But either if your are not renting it, you must present its annually and pay small amount depending of the value of the property.
As non resident you are going to be liable for your Spanish assets only. Rate variates depending the region and in case of Balears Islands where Majorca is Wealth tax rates range from 0.28% up to 3.45% depending of the value of the assets.
But not any non resident pays it. Wealth tax will be paid only when you assets are more than 700.000 euros. So, if your assets in Spain value 800.000 euros, you will pay wealth tax for 100.000 (800.000- 700.000).
If you become resident in Spain then you will be liable for all worldwide assets. Despite of this residents has a allowance of 700.000 euros + another one of 300.000 for the value of their permanent residence.
Anonymous complaints against urban illegality in Mallorca now are admitted.
The owners of illegal properties in Mallorca have a new enemy. Until recently it was necessary to identify oneself in order to denounce. From February 2019 anyone can file a complaint without identifying themselves.
That is why it is ESSENTIAL to make sure of the legality of the property you are going to buy before signing any document that commits you. (And don’t expect vendor or the agent paid by him/her will tell you the true).
As published in Ultima Hora newspaper in April 19th (read it here in local newspaper), the Consell (government of Mallorca) has received 46 anonymous complaints in two months for illegal works in rustic.
In just two months, the Agència de Defensa del Territori (ADT) has received 46 communications or anonymous denunciations for alleged illegal works. This figure contrasts with the one hundred formal complaints received throughout 2017.
The possibility of filing complaints with the ADT without the obligation to provide the name was introduced at the end of February. Previously, the Agency only admitted formal complaints, in which the complainant was obliged to provide his or her identity.
These 46 anonymous complaints were received between the end of February and last Friday. However, most of them, 26, were processed within the first two weeks of the service’s operation.
There are differences between formal and anonymous complaints. The former, in which the complainant is obliged by law to provide his or her name and surname and ID number, are processed “with priority” over the latter, which do not have the legal status of complaints. The ADT does not even refer to them as “complaints” but rather as “communications” that can be processed from its “Citizen Collaboration Portal”.
This website, which can be accessed from the ADT’s digital platform, contains a form in which the complainant is only asked for an e-mail address; the plot number, the industrial estate and the municipality in which the alleged infringement was committed, the type of construction erected without permission (if it is a house, an agricultural building, a swimming pool, etc.) and photographs of the irregularity.
Mercedes Garrido, insular consellera of Territori i Infraestructures and political responsible of the ADT, made a “positive” balance of the new service. “It must be borne in mind that the ADT is already competent in all the protected rustic land and in more than half of the municipalities of Mallorca. In this sense, citizen collaboration always comes in handy and helps the detection of infractions, since it is impossible to have enough inspectors to reach all sites.
On the other hand, Mercedes Garrido recalled that the Agència de Defensa del Territori de Mallorca was “the only agency of this type” that still did not offer the possibility of making anonymous complaints.
It must be remembered that the ADT only has jurisdiction in rustic land and, in certain circumstances, in urban land. Created in 2009, the Agency was virtually inactive until 2015, when the new government of the Consell de Mallorca amended its statutes and gave it more staff, among other actions, with the desire to boost its operation.
Buying in Mallorca. Free calculator of Taxes.
When you buy a property in Mallorca, or elsewhere in Spain you have to pay taxes.
If you send me a mail (email@example.com) or contact by Whatsapp (+(34)678216706) In a few minutes I’ll send you the calculation of the taxes and costs of the purchase of your new home in Mallorca.
Only I need to know:
a) Where the property it’s located. Municipality
b) Purchase price
c) If it is a new or used property
Law 29/1994, of 24 November, on Urban Leases was last amended at the beginning of 2019. This wording of the law has been in force since 6 March 2019.
IMPORTANT NOTICE: The text published on this website is for information purposes only. Only the Spanish version published in the official gazette is binding. Read it here