BuyWE FIND YOUR DREAM OF REAL ESTATE
We design your search for an individually suitable property for you in a manageable, fast and personal way so that you can better find your way around the mass of offers. Our in-depth knowledge of the market, even in micro-locations, helps you to implement your search criteria in a targeted manner in the sometimes unmanageable market. Our network also makes it possible to search for and offer new and existing properties across the island especially for you. With our support you save time and effort, because with us you only have one contact person.
We are happy to accept your search request and find your very own property. In addition to friendly and personal advice, you can expect the following services from our company:
- Elaboration of a personal search profile with all the criteria that are important to you in order to avoid offers that are not eligible in advance. We get to know each other personally or by phone.
- Consideration of your own experiences in the previous search in order to avoid overlaps.
- Extensive research of current and unpublished offers also via the affiliated partners and networks.
- Visits that are targeted and not pointlessly time-consuming.
- Accompaniment of all necessary administrative tasks before, during and after the purchase.
- E.g. at banks, property developers, administrations, notaries, tax consultants, appraisers and architects. This of course includes personal support during the entire negotiation and processing of the purchase, and communication through to the individual interior designer.
Which is the right way to go are happy to go, if you are thinking of buying a holiday property on Mallorca?
Well, there are a number of different factors that make up a successful property purchase in the end. First of all, it is crucial that one has the actual will and desire to own a holiday home in Mallorca, or simply decides that an investment in a Mallorca property is suitable for one's personal economic situation. At this point we would like to mention that this is not legal advice, but a purely informative text.
Getting expert advice from an experienced estate agent is one of the important first steps in finding your dream property on Mallorca. Once you have found an estate agent or real estate agency you can trust, they will usually provide you with a complete service package. If you are not yet familiar with the island of Mallorca and its interesting regions with beautiful holiday properties, the estate agent with knowledge of the island and experience will be able to explain all the differences as well as the advantages and disadvantages of certain locations to the prospective buyer. It is certainly advisable to entrust yourself to an estate agent on Mallorca who has already lived on the island for many years and is excellently familiar with the subject of property purchase and has a good network. This means that a detailed discussion between the prospective buyer and the estate agent in charge is important. A professional real estate agent will always ask the right and decisive questions in order to find out what the prospective buyer's ideas and wishes are with regard to the property he or she is thinking of buying.
During the first visits to real estate properties, which a client has then selected together with the real estate agency beforehand, it is already very likely that the prospective buyer will find his dream property on Mallorca. Admittedly, this is the ideal case. As a rule, it takes a certain amount of time until the final decision for which villa, house, finca or flat on Mallorca beats the heart. On the one hand, it is the spouses who first want to agree among themselves, or it is investors who then find a reasonable solution without including the emotional component.
There are significant differences between buying a property in Spain and buying a property in other European countries. For example, there are two different types of purchase contracts, which offer several possibilities to fix conditions and cooling-off periods. The handling of the purchase of the selected property, i.e. all preparations for the notarisation, are usually taken care of by the lawyers of the parties, i.e. seller and buyer, whereby the real estate agency is always available to support the parties. Experience shows that there are many questions and also fears during the whole process of real estate acquisition by a non-Spanish buyer, especially when no experience is available. Krohn & Luedemann Real Estate S.L. has an extensive network of renowned tax experts, lawyers and notaries and is happy to recommend appropriate addresses to its clients. The following is a small guide that gives a first insight into the process of buying a property on Mallorca.
Competent support in legal matters
Depending on the situation, it is advisable to involve other natural and legal persons in addition to the notary in the process of the purchase transaction as listed and defined below:
- Real estate agent:
The real estate agent you trust has a purely advisory and mediating function for both parties, i.e. for buyer and seller alike. A real estate agent in Mallorca should have sound basic knowledge and be able to give the buyer advice and information on the structural condition and location of a property. Legal or tax advice is not part of the real estate agent's remit.
In order to check the correctness of the information provided by the seller on the property, the lawyer is equipped with the appropriate qualities for this purpose and has access to all public instances. In this way he checks whether the property is encumbered with mortgages or other encumbrances are noted on the property in the land register. The private purchase contract/option contract with a contingency clause is also drawn up by the lawyer. The lawyer will also be present at the notarial signing of the contract. As a rule, the lawyer's service pact also includes obtaining the Spanish tax number, called N.I.E. for short, if the buyer does not already have this, which is necessary for the purchase of a property.
- Tax Advisor
The tax advisor in Spain is not necessarily the same as the classic tax advisor in other European countries. However, he is more indispensable than in any other European country, because here in Spain the tax situation is constantly changing. In this respect, one should always choose a local tax advisor or refer to the recommendation of the real estate agent or lawyer. The tax advisor will provide the buyer with an estimate of all taxes and withholdings to be paid before the transaction is notarised.
The "Escritura", i.e. the notarial deed of sale, is drawn up by the notary in consultation with the contracting parties or their representatives. The notary's very own task is to record the deed of sale he has drawn up. He checks the description of the property on the basis of a current extract from the land register and whether there are any encumbrances in rem. Unlike in many other countries, the transfer of the property to the buyer is already completed at the moment of notarisation.
- Banks/ credit institutions
In principle, it is possible to purchase the desired property with a bank loan. Sometimes, however, there are tax advantages that make partial financing attractive for the buyer. A Spanish bank usually needs only a few weeks to check the property for value and legality. The interest rate depends on various factors concerning the borrower, such as the amount of equity, the repayment period and whether the buyer is a resident of Mallorca or not.
- Authorities and bodies
Important authorities that may be involved in a classic property purchase in Mallorca include; the tax authority, the land registry and property registry. In addition, the floor plans of the property are available at the respective town hall.
The architect is in demand for many transactions. He is in a position to provide information in advance after checking the statics and building fabric of the property and thus make a valuable contribution to the decision-making process.
What else you should know when considering buying a property on Mallorca:
- N.I.E. (Foreigner Identification Number)
If a person without a primary residence in Spain buys or sells a property, he or she is doing business within Spain from a tax point of view and therefore obligatorily requires the so-called N.I.E. (Número de Identificación de Extranjeros). This means that when applying for the N.I.E. number, a registration with the tax office is made at the same time. A recommended way of applying for the N.I.E. number is to entrust it to a tax office or lawyer by drawing up a notarial power of attorney. This can be done before the notarial certification as well as directly on the day of the certification.
- Real Estate Transfer Tax (ITP)
If a private individual buys a property on Mallorca, land transfer tax is payable. This tax is paid by the buyer within one month of notarisation. Currently, the tax rate for this type of tax on the Balearic Islands is between 8% and 12.5% on the notarised value of the property. If the property is bought directly from the developer, the land transfer tax is exchanged and replaced by the I.V.A (Spanish VAT). When transferring real estate, this rate is currently reduced from 21% to 10%.
- Value Added Tax (Plusvalia)
The value added tax is a type of tax levied by the respective municipality and records the increase in value of land, excluding the buildings located on the land. This tax is borne by the seller.
- Property tax (I.B.I.)
Property tax is a tax payable annually by the property owner. As a rule, the cadastral value of the property is used for the calculation. The percentage rate is between 0.3% and 0.4%.
- Wealth tax:
The net assets of natural persons are used to calculate the wealth tax. In this respect, real estate located in Spain also belongs to the net assets. Currently, the tax-free amount is €700,000.
- Income Tax
Currently the tax rate for Spanish residents is a maximum of 21% and for non-residents 24%. If the buyer has income from the property in Spain, he must declare this income in his income tax return.
The team of Krohn & Luedemann Real Estate S.L. will be happy to answer any further questions you may have on the subject of buying property in Mallorca. You can also reach us by telephone outside opening hours on +34 602 573 690 or send us an e-mail to email@example.com.
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