Is it difficult to buy a holiday home in Mallorca???
The answer is simple: No, it is not!! Of course there is paper-work to be signed and handed over, but it is very much the same process as when buying a property in your own home country.
We do recommend you to contact a good lawyer who deals with purchase issues.
If you wish us to assist you in choosing a lawyer who speaks your language, we will be happy to help you.
If you are a non-resident in Spain the first step in the purchase-process is to obtain a NIE-Number (Número de identificación extranjero) which will be your tax identification number in Spain.
We can assist you with this and so can your lawyer. If you are not on the island when applying, a notarized copy of your passport must be presented and it could take 20-30 days to get the number through.
If you are on the island you will have to go to the Police-department for non-residents with a copy of your passport and the original passport. As there are a few formalities, we suggest you contact your lawyer or us for assistance!
The NIE- number must be presented at the final signing of the deeds.
When you have found the property you wish to buy, the procedure is as follows:
- Make an offer. You might wish to get an official valuation so that you know that the purchase price matches the market price. This can take anything from 2-7 days.
- If you are not paying in euros, agree which currency will suit both parties.
ONLY A CHEQUE OR CHEQUES DRAWN ON A SPANISH BANK WILL BE ACCEPTED BY THE SPANISH NOTARY!!
- Normally an options-contract is signed by the vendor and the buyer and a deposit of 10% of the agreed purchase-price is paid. This can be paid either to the lawyer who will keep it in a client-account, or it can be paid directly to the vendor. If the buyers need special financial assistance (such as a mortgage), a future signing date will be agreed on.
It is of course important that you understand all the issues in the options-contract and that it specifies exactly what will be included in the sale (furniture, fittings, etc.).
- When this contract has been signed by both parties the property is taken off the market.
- Meanwhile the lawyer will have requested a copy from the property-registry to check the ownership of the property is in order and to see if any debts are held against it.
- Should the buyer not be able to fulfill their agreement before or on the due date of the options-contract, the vendor keeps the 10% deposit ( if not agreed otherwise).
However, should, for some reason, the vendor fail to keep his side of the contract and not sell the property to the buyer before or on agreed date, the vendor must pay back the deposit plus the same amount again.
- The final signing of the deeds (in Spanish “la Escritura de Compraventa”) is always signed at a Spanish Notary´s office. Normally the buyers will get a “copia simple” of the new “deeds” after signing. However, the official Deeds are normally delivered 3-6 months later, once all taxes and dues have been paid and the Deeds have got their legal stamp.
MORTGAGES IN SPAIN:
The following documentation is required by Majorcan banks:
- copy of passport (-s)
- copy of your P-60 form (if you are employed) (more information on www.creditexpert.co.uk)
- last 3-6 months payslips
- proof of any other income (pension-fund, life-insurance, other investments)
- last six months statements plus a bank reference from current bank
- if you are renting a property, the last 3 months paying in slips
- if employed, a reference from the employer
- if you have a mortgage with another bank, full details of repayment-scheme
- copy of the title-deeds of the property you wish to purchase
If you are a self-employed or a limited company, copies of the last 3 years audited accounts must be presented, as well as a certificate from the accountant confirming salary/dividends/net profit figures for the last 2 years. A copy of your last tax-return must also be presented.
Please remember that the more proof of earnings that you can provide,, the higher percentage the bank will consider lending you. Normally a non-resident will be offered between 60-70% of the official valuation amount and a resident will be offered between 70-80%, depending on age and earnings.
If you are granted a mortgage, a bank account will be opened and an official valuation will take place. This charge will be debited the client.
COSTS WHEN BUYING PROPERTY IN SPAIN:
If you are purchasing through a real estate agents, their fee is paid by the seller.
The property transfer-tax is 8% (when purchasing a new-built apartment or villa or a re-sale.
There is also a legal acts stamp-duty of 1% of the value of the property.
Furthermore, it is not unusual in Mallorca that the seller pays the “plus valía” (capital gains tax) of the vendor. Make sure you discuss this with your lawyer!
The charges for the notary and the property-registry are also to be paid by the buyer.
All in all the charges are approximately 10-12% of the value of the property.
Annual property tax (IBI) and garbage-collection (basura): Paid yearly to the town hall. Each town-hall have their own tax-laws.
A resident, as well as a non resident, property holder in Spain pays income/wealth tax once a year.
If you live in a community, there will be a monthly/quarterly or yearly charge to be paid, please ask the president of the community for more information.
In many communities the water is included in the community-charges. Of course electricity, phone, insurances, etc. will be additional.
ENJOY YOUR NEW HOME IN MALLORCA