If you are looking to purchase property in Mallorca (Spain) this year, there are a few bureaucratic steps you will need to know about before you start and others to avoid.
The bureaucratic process of buying real estate in Mallorca can be confusing if you are new to it, and there are some points worth learning about first, to help you avoid scams or expensive mistakes. This is also useful for tax reasons, like understanding the capital gains tax and what taxes you will have to pay in order to buy a house in Spain. A bit of research into and ups and downs of the property market of the area you wish to buy in also helps enormously.
YES. In order to buy a property in Mallorca legally you are required to have a NIE ( Numero de Identidad de Extrajeros ). Your NIE is unique and does not expire. It is also needed to carry out any form of legal transaction in Spain, and you will have to have it to sign the Deed.
Getting a NIE is not difficult, though it can be time consuming. It is often easier to speak to your real estate agent or hire the services of a gestor to get the paper work ready for you.
NOT NECESSARILY. Having a Spanish bank account is not a legal requirement to buying a house in Mallorca, however, if you do have one it will certainly make things easier for you; the formalities, the speed to transactions and possibly the amount you pay in commissions may make having a Spanish bank account worthwhile before you buy a house in Mallorca.
NO. However, if you own a house in Spain and you are not a resident in Spain you will be required to appoint a tax representative.
There may be small variations, depending on the type of property, area, of the island usage, nationality of the buyer and seller, these are the key steps to buying a house in Mallorca:
TAX AND BUDGET
The costs are paid mainly by the buyer.
Property Transfer Tax - 6-10% or 10% IVA (VAT) for new builds.
Notary Fees, Title Deed and Registration Fee - 1-2,5%.
Legal Fees - 1-2% (incl IVA).
NIE
You can get your NIE number either from the Extranjeria Offices in Palma or with the help of a gestor and/or your real estate agent.
It is also worth noting here, that you can apply for Spanish citizenship as a property owner in Spain. This is called the Golden Visa Residency Programe.
FINDING YOUR HOUSE IN MALLORCA
Again, you can do the work yourself or hire the services of a professional property finder or real estate agency.
RESERVATION AGREEMENT
Once you find the house you want to buy, you will sign a reservation agreement and letter of intent, where you negotiate the terms and agree. At this point the downpayment is paid directly to the seller.
PAYMENT
Then you pay the Transfer Tax and update the property details at the land registry.
As a new porperty owner on the island you will be required to pay taxes every year, regardless of whether you are a Spanish resident or not. However, they vary.
If you a Resident in Spain - You are subject to Income Tax (as well as Capital Gains Tax) and IBI (property tax).
If you are Non-Resident in Spain - You are subject to Income Tax (as well as Capital Gains Tax) and IBI (property tax). AND ALSO Non-resident property tax.
____________________________________________________________________________
If you would like further information on the ins and outs of the buying process, the taxes and costs, or help finding a house to buy in Mallorca, please contact us at one of our offices in the north of Mallorca:
Paseo Saralegui 48 (07470)
Carrer dels Mariners 8 (07400)
Our Office in Puerto Pollensa
+34 971 86 57 67You can find us in Paseo Saralegui 48
07470, Puerto Pollensa
Our Office in Puerto Alcudia
+34 871 114 800You can find us in Carrer dels Mariners 8
07400, Puerto Alcúdia
We`ve got
Mallorca Covered
Sign up and be the first to know new listings and great oportunities
