Purchase of houses and apartments in Mallorca
According to Spanish law, the purchase of a property is legally binding even without notarial certification. In the land register or property register (registro de la propiedad), however, the change of ownership should be registered and for this the purchase contract must be notarized (escritura pública de compraventa). All EU citizens are legally treated equally here.
However, once the buyer has decided on his property, a few questions should be clarified, such as
- Documents that the seller must provide
- Examinations by architect
- Examinations by the expert
- Examinations by the tax consultant
- Examinations by the lawyer
- Financial audit
This may take several weeks.
Private contracts are concluded in advance so that both parties can document their commitment to the purchase commitment during this time:
- the reservation contract
- the option contract
- the private sales contract
With the reservation contract, the seller keeps the property free for a small fee against a reservation fee.
With the option contract the seller and buyer are bound to the purchase contract for a longer period of time (up to two months). As a rule, an option fee of 10% of the purchase price is agreed. If the buyer withdraws from the purchase, this option fee remains with the seller. If the seller sells the property to another buyer, the buyer's option fee usually has to be repaid twice.
A private sales contract can also be concluded, which must then be sealed by a notary contract for entry in the land register.
At the time of notarization, the notary draws an extract from the current land register and blocks the property for other buyers for 10 days.
The notarized purchase agreement contains the personal data of the parties, the exact description of the property, the purchase price and the payment modalities and any existing encumbrances. The notary verifies the identity of the parties, whether the details of the parties match the data of the property register. It ensures that the last receipt for the local community tax ( Impuesto Sobre Bienes Inmuebles -IBI) and, in the case of the sale of a property in a community facility, a certificate from the president and administrator confirming payment of the community costs. On this day, all payments are usually made between the seller and the buyer, including the bank.
After signing the notarial deed, the notary must notify the land registry office of the deed within 24 hours at the latest.
The registration of the new owner at the land registry office can take place after the land transfer tax has been paid at the tax office.
Acquisition and follow-up costs
The buyer must pay either value added tax (IVA) or real estate transfer tax (ITP) once when purchasing a property.
Value added tax (IVA)
The 21% VAT is only payable on the sale of building land and business premises by a company.
Only 10% value-added tax is incurred when purchasing from a property developer (new building). All subsequent transfers are not subject to VAT, but to real estate transfer tax.
All sales from private owners (or those not subject to VAT) are subject to the Real Estate Transfer Tax (ITP) in the Balearic Islands.
up to 400,000 euros purchase price, the ITP remains 8%.
from a purchase price of more than 400,000 euros, the share above the amount is calculated progressively:
between 400,001 and 600,000 euros is calculated at 9%.
from 600.001 Euro is calculated with 10%
Property tax (Impuesto sobre Bienes Inmuebles, IBI) is levied on the value of rural and urban land on the basis of the cadastral value of the municipality and is usually between 0.3% and 0.4% of the cadastral value.
If the owner rents out his property, he must always pay income tax.
If the property is used for own purposes but not as a main residence, 2% or 1.1% of the cadastral value is taxed as income.
In addition, the buyer has to pay about 1 - 1.5% notary and registration fees.