Purchasing a property in Mallorca (a quick guide)

Buying a house is an important decision that requires the intervention of qualified professionals to have a good buying experience. We have divided this process into 6 steps making a brief description of each one:

 

1. LOOKING FOR A PROPERTY

alt At Comfort Estate Agents you will find a wide range of properties all around the north of the island as well as all the support and advice to make the buying process quick, safe and understandable.




2. TAKE ADVICE FROM SPECIALISED PROFESSIONALS

We recommend with all purchases to use the help of a lawyer once you have found the property you were looking for and there is a first agreement in conditions and price. We are in contact with several experienced legal professionals that will guide you and give you advice during the buying process.

If for any reason you decide to not use a lawyer, Comfort Estate Agents will be in charge of coordinating all the process using its own collaborators.

What is strictly recommended when you finally buy a property is to hire a gestor to register it and who will keep you informed on when you have to pay your yearly wealth tax.

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3. CHECK THE STATUS OF THE PROPERTY

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The Spanish Property Registry Office contains details of the current owners and the possible outstanding debts that may be registered against the property.

At Comfort Estate Agents we make sure that the property you buy has no debts that could cause you inconveniences in the future. The way to proceed to be informed about this, is to request a “Nota Simple” at the Property Registry Office in the Community or Town you wish to buy a house.

4. RESERVE THE PROPERTY

Once you have found your property, the next step is for buyer and seller to sign a reservation contract. This way the property is taken off the market and secures it for you. The general idea is that the two parties (vendor and purchaser) make a formal commitment and if this commitment is not carried through, the affected party will be compensated, vendor by keeping the deposit or purchaser by receiving twice the deposit given in the reservation contract.


This reservation contract will be prepared by Comfort Estate Agents and usually you will be required a deposit of roughly 10% of the property price (sometimes a lower amount can be accepted). In addition, it is necessary to mention the day when buyer and seller will meet in front of a Notary to sign the official document to put the property under the purchaser’s name.

5. FINANCE THE PURCHASE OF YOUR HOME

If you need to finance your property in Mallorca, we can help by introducing you to some of our collaborator Banks. They will study your operation giving you an answer in a short period of time and without any cost.


Spanish Banks normally offer mortgages to non residents, of up to a 60% - 70% of the property valuation or the sale price.


Mortgage interest rates in Spain are among the lowest in Europe (EURIBOR + 2 / + 2,5 %).

6. SIGN THE FINAL CONTRACT

To become the new owner of the property, you will need to sign the final purchase agreement in the presence of a Notary and pay the pending amount.

The last legal step is to register the Public Sales & Purchase Agreement at the Property Registry Office.

 

 

PURCHASING EXPENSES

 

 

TAXES

Once you have signed the contract at the Notary’s office, you will have to pay a series of taxes and levies. These vary according to the type of property you buy and the town where you purchase it.

Type of property

Brand new home: You will have to pay 10 % VAT. This payment is made to the Developer at the Notary’s office. You will also need to pay 1.2 % for ‘Documented Legal Acts’ (D.L.A).

Second-hand home: When the property is purchased from a private individual, the percentages to be applied for  ‘Transfer Tax’ are the following:
- The first € 400,000 taxed at 8%.
- From € 400,000.01 to € 600,000 taxed at 9%.
- From € 600,000.01 will be taxed at 10%.

 



These percentages are calculated on the purchase price of the property.

 

Town

There is a Municipal Capital Gains Tax (“Plusvalía municipal”) on property which varies depending on the Council of the Town or City where you are planning to make your purchase.

 

 

DUTIES

Notary

The fees charged by the Notary are regulated by law and vary according to the amount of the transaction, the type of operation and what terms are agreed.

Notary fees must be paid when the contract is signed and usually the range of prices is between 300 € and 800 €. If the selling price of the property is very high then the Notary fees can be higher as well.

Property Registry Office

This is the office where the property will be registered under your name. Its fees are regulated by law and usually amounts to roughly 70 % of Notary fees.

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OTHER EXPENSES

Valuation

If you apply for a mortgage, the Bank is legally required to demand a valuation on the property being purchased. This valuation must be conducted by a company that has been approved by the BANK OF SPAIN.

The cost of the valuation varies according to the price of the property and usually goes from 200 € to 400 €.

Solicitor


If necessary, usually amounts to 1% of the selling price.

Altogether, in order to have a rough idea, the expenses you will have when buying a property will be around a 10% - 11% of the selling price (please see the following GUIDING TABLE OF PURCHASING EXPENSES).
icon Download table of purchasing expenses (253.08 kB)