Buying a property in Mallorca or Spain differs from the process in your home country.
We will introduce you to the most important points to consider and what you should do before buying a property in Mallorca.
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What is the process of buying a property in Mallorca?
A typical process for buying a house in Mallorca is first of all the conclusion of a privately written preliminary contract (so-called option contract or contract with penalty payment), going to the notary, paying taxes and finally entering the new owner in the land register.
Which preparatory steps are recommended?
You should apply for a so-called NIE number very early on. This is a foreigner identification number that also acts as a tax number in Spain. Depending on the workload of the Spanish immigration office, several months can pass from the application to the issuing of the NIE number. You should also open a Spanish bank account in good time, on the one hand to be able to issue the bank checks that are usual here in Spain for the purchase price payment and on the other hand to have the ancillary costs processed later.
What is the option contract?
In the option contract, you acquire an option right for the property against payment of approx. 10 percent of the purchase price. During the option period, which can be freely selected, but is usually around three months, the buyer then has the opportunity to put the property through its paces.
Why is notarization important in Spain?
While in other countries a property cannot be acquired without a notarial certification, this is generally possible in Spain but not advisable. A purely private written sales contract is not enough to have the new owner entered in the land register later. Notarial certification is always required for this.
Can I have my lawyer represent me before the notary?
Yes, representation by your own lawyer is generally possible. For this purpose, only a corresponding notarial power of attorney has to be issued in advance.
What taxes are there when buying a house in Mallorca?
After purchasing the property, you typically have to pay the property transfer tax, which is currently between 8 and 11 percent depending on the purchase price. But there can also be constellations in which the Spanish VAT (either 21 or 10 percent) as well as the so-called stamp tax on legal documents is due.
What should you plan for the ancillary costs in Mallorca?
In order to be on the safe side, it is advisable to calculate between 10 and 15 percent of the purchase price for the additional home purchase costs. This calculation takes into account the following ancillary acquisition costs: real estate transfer tax, fees for lawyer and notary, land registry fee.
What needs to be considered after the purchase?
After the purchase and payment of taxes, the new owner must still be entered in the land register. The supply contracts (electricity, gas, water) must also be re-registered with the new owner.