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Email: info@casa-property.com

Tel: (+34) 63435 1111
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QUESTIONS ANSWERED

- Buying a Property in Mallorca
- Drawing up the Title Deeds ( Escritura)
- Purchase expenses
- Other Costs
- Licences
- Finance
- Banking
- Taxation
- Health Care
- Education
- Language
- Moving to Mallorca

 

Buying a Property in Mallorca

In order to avoid problems, it is very important before buying any property (house, land, business or garage), to verify its existing planning consents and to establish if there are any outstanding debts.
The property should be free of debts. If there are outstanding bills, the owner should pay them before selling or deduct them from the sale price.

If you wish to buy a property in Mallorca that doesn't fulfil all the prerequisites, it is important to have the appropriate information and to have knowledge that possibly, in the future, you may be required to make additional payments.

To fully guarantee your purchase, you should consult the following offices for information:
1. Planning Department of the Town Hall.
2. Land Registry.
3. Tax Office.
4. Community of Owners (if the property is part of a community).
This information can be requested by yourself, your advisor or your representative. It could take one or two days to verify all of the necessary details.

Drawing up the Title Deeds ( Escritura)

The title deed (escritura) is the document that you sign when buying a property. It is formalised in front of a Notary and the purchaser and the seller should be present to sign the terms of the purchase. If you cannot be present, another person can represent you with a notarial power of attorney in Spanish.

In order for a title deed to have complete validity it must be registered in the land Registry, which is the public body where all purchase-sales are registered in this area. It isn't sufficient to simply sign the deeds, it is essential to register it in the Land Registry.
The title deed is formalised in a Notary Office.
After the signing of the title deed, the Notary will supply you with a Copia Simple, a provisional copy of the deed. You will receive the formal deeds at a later date once it has been inscribed in the Land Registry.
The inscription in the Land Registry of Torrox can be carried out either by yourself, your representative or the Notary, who will charge about 78 � for this service.

Purchase Expenses

Apart from the price of the property, you will pay approximately an additional 10% for the following purchase expenses:
1. Notary Expenses These expenses depend on the selling price that appears in the title deed. The Notary expenses are paid according to the agreement between purchaser and seller, however, it is the custom that the purchaser pays all the expenses. A Foreign Non-resident has one month to present the NIE number (identification number for foreigners) in the Notary Office.
2. Value Added Tax (IVA) Only for New Property
You must pay the builder 7% IVA of the price that is declared in the title deed when purchasing:
o A home.
o A garage with a home in the same building.
You must pay the builder 16% IVA when purchasing:
o A business premises.
o A garage without a home.
It will show in the title deed that you have paid this tax to the builder.
3. Stamp Duty (Oficina Liquidadora)
New Buildings:
If you have bought a newly constructed property and have already paid the IVA, you must pay 1% tax based on the price that appears in the title deed to the Oficina
Liquidadora.
Resale’s and Land:
If you have bought a resale property or a land, you must pay 7% tax based on the price that appears in the title deed to the Oficina Liquidadora.
4. Land Registry (Registro de la Propiedad)
After the purchase of a property, and to ensure that the sale has total validity, you must inscribe the title deed in the Land Registry of Torrox. The amount you pay will depend on the declared price in the title deed.
5. Land Value Tax (Plusvalía)
The Plusvalía is a Town Hall tax and it is paid only once at the time of purchasing a property. It depends on the rateable value of the property and on the number of years which have elapsed since the last sale. To obtain the exact amount payable, you can consult the Rentas Department
6. Public Treasury Tax (Hacienda) 5%
This tax applies only if the seller is a Foreign Non-resident and if the title deed is dated after 1987. The purchaser must discount 5% from the declared sale price and deposit it with the Hacienda Office in the name of the seller.
Example:
The sale price of a property is 100,000 €
The purchaser will discount 5% -5,000 €
The final price the purchaser gives to the seller is 95,000 €

OTHER EXPENSES ( After Purchasing)

After completing your purchase, it is essential to change the seller's name to your name on al! of the following receipts:
1. Land Value Tax (Plusvalía).
2. IBI-Urbana Property Rates.
3. Water.
4. Electricity.
5. Community of Owners (if your property belongs to a community).
In order to effect the change of name, you must present your new title deed in the following offices:
1. Land Value Tax (Plusvalía): Town Hall
2. IBI- Urbana Rates: Tax Office (Oficina de Recaudación). Besides the title deed, you must present your NIE number and the last receipt of IBI-Urbana Rates.
3. Water:
The change of name is free. If there are any outstanding debts you must pay them before the contract can be put in your name. If your property is on the outskirts of Nerja and does not receive water from the municipality, you should find out which company supplies your water.
4. Electricity: Company Endesa in Palma.
The change of name will cost approximately 35 €. If there are outstanding debts from the last owner, you need to make a new contract that will cost you from 90 € to 110 € depending on the level of power.
5. Community of Owners:
If your property belongs to a community, you should find out who the Administrator is in order to notify the change of name.

LICENCES

This is related only to businesses. Alll businesses in Mallorca must have an 'Apertura' (Opening licence) in order to start trading. This is obtained when the local authorities approve a 'Proyecto' (Project) submitted by a qualified architect/engineer of the premises and installations and can run to over 100 pages of specifications and plans. Final approval is given upon inspection by the authorities that all the regulations in force at the time have been met.

In addition to the above, if the business is a bar, club or restaurant it must have a 'Turismo' licence, and the owners a 'Food handlers' certificate (we will arrange for you). 'Music' licence requirements vary from one resort or area to another and can sometimes be quite stringent.

Some local councils insist that sound 'limiters' are installed to control the volume of music played, and others more casual with the attitude 'If nobody complains it's OK'. Note the 'Apertura' and 'Turismo' licences belong to the business itself and not the owner.

licences

FINANCE

Spanish banks will often lend up to 80% on a Real Estate property and 60% on a freehold business property but will not consider financing leasehold or rental properties. We can help you to find best offers for mortgages.

BANKING

You can open a new account for you in just five minutes - all we need is a copy of your passport and a UK address! Your cheque book and cash card will follow in four days.

Sterling transfers from your UK account to Mallorca take few days and on some banks there are 0% comissions for transfer from UK.

TAXATION

Please refer to our friend website for more info regarding Taxation and after purchasing expenses: www.exploringmallorca.com

ACCOMMODATION

To buy a property you will need to know the area and to view tens if not more Properties. We can arrange viewings as maximum of properties as we can per your stay Anyway , please allow at least few days per your fist visit on the island, to understand better what you are looking for. If you will need accomodation for your stay, we can help to find you a Hotel or private Apartments.

HEALTH CARE

The Spanish National Health service is generally acknowledged as being excellent and is free to foreign residents, business owners and their families paying into the social security system.

This is compulsory to all business people working on Mallorca whether foreign or Spanish and the monthly cost is approx 225 euros. Should you also wish to go private, there are many companies offering excellent cover at around 30 euros per person monthly.

EDUCATION

Standards in the Spanish state schools are high. As with the health care it is free except for a nominal charge for exercise books, etc. Younger children are best enrolled into this system and usually adapt to the language and make new friends very quickly, in all probability there will already be a number of British children in the class.

For older children already in the GCSE system there is a choice of five private British schools on Mallorca whom operate exactly the same syllabus as in the UK.

Pass levels and university entrance selection are well above the national UK average.

LANGUAGE

We recommend of course that you make the effort to learn some basic Spanish but in practice most business people, doctors, suppliers, etc. on Mallorca speak perfect English so it is not essential.

Whilst convenient to newcomers it is sad in a way that English is so widely spoken as it does encourage us to be lazy and not bother to learn. Most towns and resorts hold evening classes in the local schools over the winter months to encourage us and the courses are free!

You should never encounter any hostility from the Spanish people as to the fact you are a foreigner, in fact we would say it is exactly the opposite. You will soon make Spanish friends and be invited to join in their family activities.



MOVING TO MALLORCA

There are many companies specialising in overseas removals and we will be only too pleased to arrange a quotation for you. As a generalisation allow ₤100/150 per cubic metre door to door.

Should you prefer to drive over the cost will be around ₤600 including the two ferries, overnight accommodation and petrol.

There are no restrictions as to what you can bring with you. All UK electrical goods will work on Mallorca simply by changing the plug, excepting that TV's will need a simple conversion (approx ₤30) if you want to tune into the local stations.

Do bring your satellite system with you, it will work fine with an 130/140cm dish but note you must retain a UK address and bank account for the subscriber card.

Pets can be bought over by road or air without quarantine providing you first obtain an export certificate and vet's endorsement.

It is generally considered best to sell your car in the UK and replace with one bought locally on Mallorca due to the impracticality of RHD and the cost of changing to Spanish plates which is compulsory once you become resident.

Of course, there will be 101 other things you may wish to know. Rest assured that having had several years experience in Mallorca we will most likely have the answers, or at least know where to find them.

Remember that it is also very much in our own interest that you settle as smoothly as possible and that you will be impressed with our service - we rely on you for recommendations.

YOUR SUCCESS IS OUR SUCCESS.