By attorney and abogado Dominic John Patrick Porta
The dream of buying real estate in Mallorca can quickly become a nightmare, unless you know the small, legal peculiarities that need to be considered. Because even if Mallorca is often seen as the 17th state of Germany, it remains part of Spain and the legal bases are, which are applied to a real estate purchase in Mallorca, are therefore very different.
Guide to buying real estate: What is the process of buying a property in Mallorca?
A typical procedure in the purchase of real estate in Mallorca is first the conclusion of a pre-contract in private writing (so-called option contract or contract with penalty), going to the notary, the payment of taxes and finally the registration of the new owner in the land register.
What preparatory steps are recommended in the purchase of real estate Mallorca?
Professional advisors in the purchase of real estate indicate to apply for a so-called NIE number at a very early stage. This is a foreigner identification number, which then also functions as a tax number in Spain. From application to the issuance of the NIE number can take several months, depending on the workload of the Spanish Immigration Office. Likewise, you should open a Spanish bank account in time, on the one hand to be able to issue the usual bank checks here in Spain for the payment of the purchase price for the purchase of real estate in Majorca and on the other hand to later settle the incidental costs of the house over it.
What is the option contract in the purchase of real estate Mallorca?
In the option contract one acquires an option right for the real estate acquisition on Mallorca against payment of approx. 10 per cent of the purchase price sum. During the option period, which is freely selectable, but usually amounts to about three months, the buyer then has the opportunity to check the purchase object on "heart and kidneys".
Insider guide to buying real estate: Why is notarization important in Spain?
While in Germany a real estate cannot be acquired at all without notarial certification, this is generally possible in Spain, but not advisable, so it knows numerous advisors of the real estate purchase. A purely privately written contract of sale is not sufficient for the purchase of real estate in Mallorca to register the new owner later in the land register. For this purpose, the notarial certification is always mandatory.
Can I be represented before the notary by my lawyer as a counselor in the purchase of real estate?
Yes, representation by one's own lawyer is in principle possible in the purchase of real estate Mallorca. For this purpose, only a corresponding notarial power of attorney must be issued in advance. This can also be signed in front of a German notary, taking into account some special features.
What are the taxes on the purchase of real estate in Mallorca?
After the purchase of real estate in Mallorca, typically the land transfer tax is payable, which is currently between 8 and 11 percent depending on the purchase price. However, there may also be constellations in which the Spanish VAT (either 21 or 10 percent) as well as the so-called stamp tax of legal documents is due.
What should you plan for incidental acquisition costs when buying real estate in Mallorca?
To be on the safe side, it is recommended for the house acquisition costs before the real estate acquisition Mallorca between 10 and 15 percent of the purchase price to calculate. In this calculation, the following ancillary acquisition costs are taken into account, as recommended in guidebooks on real estate purchase: land transfer tax, fees for lawyer and notary, fee land registry.
What to consider after the purchase of real estate in Mallorca?
After the purchase of real estate in Mallorca and payment of taxes, the new owner must still be registered in the land register. Likewise, the utility contracts (electricity, gas, water) must be re-registered to the new owner.
