Information - Buying a residential property on the island of Mallorca
Advice from Imperial Properties
This is a step by step guide to buying a property on the island of Mallorca and although we have been thorough with our research and information this does not substitute professional or legal advice from a qualified expert (We would be happy to introduce you to a qualified expert / English speaking lawyer we have worked with for many years or we are equally happy to work with a professional of your choice).
STEP 1
You will attend viewings of various properties in your chosen location and once you have seen the property you like your offer will be negotiated by Imperial Properties SL.
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STEP 2 |
(RESALE PROPERTY)
He/She will check and approve the contract of sale or prepare one himself. He/She will then
i Check the property belongs to the seller
ii Check the property is completely free from debt
iii Check that the property has the correct building permissions
iv Will give an estimate at this time of the taxes you will expect to pay on the purchase
v Acquire and confirm the stated price on the deeds
(NEW BUILD PROPERTY)
i All necessary checks will be made on the land
ii A background and financial check will be made on the constructor.
STEP3
Only when the lawyer is satisfied will the option contract (stating your intention to purchase) be signed and 10% of the purchase price will be released from yourselves at this point.
FROM THIS STEP YOU ARE COMMITTED TO THE PURCHASE.
STEP 4
All residential property sales are completed formally at the notary. A notary date will be set by your lawyer and must be attended by 1, The Purchaser 2, The Seller (or Power of Attorney can be given (please contact us for further details) usually to your lawyer. The notary is the public official whose duty is to ensure the final legal transaction is carried out.
STEP 5
The Notary puts on public record that the title deed recording the sale/purchase has been signed in their presence and understood by both parties.
STEP 6
You will be given a copy of the title deeds, the original will be presented by your lawyer to the appropriate land registry and registration will be complete.
A GUIDE TO COSTS AND FEES
The following is meant as a guide only, however it is a reasonable summary of costs you will need to pay:
- RESALE PROPERTY - 7% TRANSFER TAX
- NEW BUILD - 7% TRANSFER TAX + 1% STAMP DUTY
- PLOT OF LAND - 16% VAT + 1% STAMP DUTY
- NOTARY COSTS - 1-3% Inc municipal tax, legal fees etc.
- NB It is recommended that the purchaser assumes 10% of the purchase price of the property to cover all taxes;(12% if you are requiring a mortgage) this will ensure the budget is correct and you may even have change!
- LAWYER COSTS - Usually 1 – 1.5% of the purchase price
FINANCE
If you require a mortgage for a purchase in Mallorca, you are usually allowed to borrow 70% of the purchase price or valuation whichever is greater (NON RESIDENT) 80% (RESIDENT), the mortgage can be arranged in Mallorca through a Spanish bank or an English bank based in Mallorca. Alternatively you can arrange this through an English bank that deals with mortgages for Mallorca.
We at Imperial Properties are happy to assist you by introducing you to banks we deal with on a regular basis.
