Real Estate Law

To safely buy Mallorca real estate

Spanish real estate law - we will be happy to advise you!

Whoever thinks of real estate on Mallorca, thinks of summer, sunshine, holidays, and possibly even an own object on the island. Wouldn’t it be nice to be able to afford a property on Mallorca? Clearly: Yes! But please don’t just pay attention to the called-up purchase price. There are a lot of other points to consider when buying a property:

Verification of the property: Is the seller of the property really the owner? Does he have any powers of attorney? Are there any burdens?
Is the property legally registered in the land register and the cadastre? What may not be legal and/or legalisable?
Are there any differences between the entries in the land register and the cadastre? Are they significant or are they bearable?
The structural qualities should furthermore be examined by an expert.
Can I finance the purchase price? Where do I look for financing?
What taxes and costs are associated with the purchase? What taxes and obligations await me as owner and afterwards?
How do I become an owner? The usual purchase procedure

The costs when buying & selling real estate

The acquisition costs

In addition to the purchase price, the purchase taxes (land acquisition or IVA), which vary from 8-11 percent (possibly 10 or 21 percent IVA), must be taken into account. In addition, there are costs of the notary and the land registry and, not to forget, the tax office (Gestoria, who make the tax payments) and, if you so decide, the attorney.

Ownership costs

If you are registered in the land registry and with the municipality as the owner, two types of tax are payable annually: 1. The property tax, and 2. The income tax on the income of the property. Since they often have no income, the Spanish state has called a fictitious income tax for non-resident property owners with property in Spain.

Costs of Sale/ Transfer

As far as you want to sell the property again or transfer it to your children, different taxes are to be expected here as well. In the case of inheritance, the heir will naturally also be asked by the Spanish State to pay.

How do I become an owner?

The preliminary contract

Once a property has been selected and all costs are presented, a preliminary contract is usually concluded so that the buyer secures the property and the seller also has security should the buyer change his mind. In this case, the buyer usually pays a deposit of 10% of the purchase price (this can be negotiated differently), which is then taken into account in the notarised purchase agreement.

If the buyer withdraws from the contract, he loses this down payment, if the seller does not perform, the buyer will be refunded the amount paid plus damages in the same amount. A deadline for the signing of the notarised purchase contract is agreed upon in the contract.

The notary appointment

At the notary appointment, the Vendor must hand over a large number of original documents to the Purchaser, which were already to be provided in the previous inspection of the property. After handing over the purchase price, the buyer receives the key to the dream property and can finally move in, renovate,...

Land register entry

Once the notary contract is signed, the purchase taxes must be paid on time (deadline 4 weeks) and the change of ownership is applied for in the land register and cadastre. In contrast to lots of other countries, the buyer is already the owner with the signing of the purchase contract. Registration in the land register is not necessary for this but is always strongly recommended.