BUYING RULES FOR A PROPERTY IN MALLORCA
Where your property is located, despite the fact Mallorca is a small island, will determine your way of life here. Given the islands incredible diversity, living in Palma and living in one of the small villages of Mallorca will bring to two entirely different lifestyles. If the village is touristic, life in summer is completely different to living there in the winter.
So, start by deciding what you are looking for, whether it be a property in the country side or urban area, a town or village, and then research the market.
Nowadays, thousands of Real Estates are offering properties on web pages such as: idealista.com, milanuncios.com or fotocasa.es.
TIP NUMBER 1. DON’T RUSH – Do not listen when a vendor or intermediary says that someone else will buy the property in a matter of days unless you sign a commitment. 90 % of the time this is not true but they want to get you to sign before any other intermediary does so that they get the commission.
Remember this is a decision that could have implications on your entire live and Mallorca is full of properties on the market, so don’t play their game and take your time.
Once you know you know the “shell” of the property you need to ensure there is nothing hiding behind that shell. Do not expect the vendor or his agent to inform you regarding illegalities because it is likely that they do not know themselves if it is in accordance with the law or not.
The property you are going to buy must be free of debts such as mortgages, pending payments to the community of owners, urbanisation payments or other debts that may encumber the property.
It must also be up to date on periodic payments.
TIP NUMBER 2. Hire an independent Real Estate Specialist Lawyer. This will save you a lot of trouble and money in the future.
This will be the starting point of the negotiation process and must specify not only the price you are willing to pay but also the terms and conditions.
Bare in mind that transferring money to Spain or getting a mortgage may take some time, so it may be that you are not able to fulfil the contract immediately.
The reserve may be done by menas of an Option contract, Security Deposit, or Earnest Money Contract. This is not mandatory, so this step can be skipped and and you can proceed directly to the signing of the public deed, but it’s recommended.
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.
Option premium is normally 10% of the purchase price. As this contract is binding, there is a penalty for those who fail to comply with it.
The Spanish system does not permit the property to be inscribed if the purchase deed is not signed in the presence of a Public Notary, so the Notary will create the deed in Spanish and it will then be translated to you.
New property requires the payment of VAT on the day of the purchase, and if you are buying a second hand property you have 30 days to pay the transfer tax.
In Land Registry: It is not obligatory but highly recommended. The Land Registry is public and it protects you from third parties. If registered, no one can buy the property registered in your name without your consent.
Also in Cadaster and Community of owners
As a new owner you will pay Land Tax, Garbage Tax, Non Residents Tax (model 210) and if your assets in Spain have a value of more than 700.000 you will also be required to pay Wealth Tax.