Guide to Buying a Residential Property in Mallorca
Buying a property in a foreign land is not an easy decision especially when one does not speak the language but here we hope to give you some insight into some of the taxes and other costs that are incurred in the sale.
Finding That Special Property
Mallorca has so many different environments to choose from – the sea, the mountains, village life, country living, etc, that it is important that you first decide what area of the island suits your needs most. Following this we can assist you in finding that special property to call home.
Realty Mallorca’s Assistance
Realty Mallorca has many properties listed, both houses and apartments of many descriptions and varying price ranges. You will be able to view the properties of your choice and once you have found the one of your choice we can then negotiate your offer.
With the decision made and the offer accepted it is advisable that you acquire the services of a Lawyer.
In Spain it is your Lawyer that does all the searches on the property to be sure that everything is in order. These searches can include:-
– That the property does in fact belong to the owner
– There is no debt on the property
– The building permissions are correct
– Confirmation of the price on the Deeds
– Approval of the Contract of Sale or preparation of a new contract
Your lawyer will at this time give you an estimate of the necessary Taxes included in this purchase and the length of time it will take to close the deal.
Always make sure that you know what the total fees will be before signing the contract.
Once this has been achieved and everything is to your Lawyer’s satisfaction then the next step is the signing of the contract of the Option To Buy which must include a 10% deposit of the final price of sale. This states your intention to buy.
The Notary is an essential part of the process as they are the ones that do the completion of all Residential Property Sales. Your Lawyer will set a date with the Notary, and all concerned in this sale must attend ie. the Purchaser and the Seller. The Notary is the Public Official who is responsible for carrying out the final leg of the transaction of this Property sale. The Notary puts on public record that the signing of the title deed has been accomplished in the presence of both parties and understood by both parties.
Soon after this has been done you will be given a copy of the Title deeds for your property. Your lawyer will present to originals to the Land registry.
Taxes and Fees Involved in the Sale of a Property
– Transfer Tax (ITP) – is a sliding scale depending on the price of your property.
The ITP is calculated as follows:-
Purchase Price up to €400,000 – 8%
Purchase price from €400,000-€600,000 – 9%
Purchase price from €600,000 and up – 10%
– 10% IVA on new properties. (Not included in older properties)
– Stamp Duty – approx. 1.2%
– Notary Fees
– Property Registry Fees
– Lawyer’s Fees
Generally there is approximately 10-12% on top of the sale Price in Taxes and Fees to do with the sale of the property.