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Mallorca buyers guide
 When you've made a decision to purchase property in the Balearics, we strongly recommend that you use a lawyer from the local region.
We can assist you in this and can provide names of several who are also excellent English speakers. There are a number of stages and processes which need to be completed before you're ready to sip Sangria on your chosen terrace!
These are the four stages:
1. Choose the right property for your budget and practical requirements
2. The two mandatory contract Stages
a) Reservation deposit:
The reservation deposit secures the property, and the property is taken off the market for 2-3 weeks. The deposit is usually between 2000€ - 5000€ depending on the type of property being purchased. This period is essential and allows your solicitor to do the necessary searches, to make sure the property is safe to buy. The reservation deposit is refundable if the property turns out to be unsuitable or your finances alter before the purchase.
b) Option to buy contract:
When you have the sale go-ahead from the solicitor, an ‘option to buy’ contract is prepared and agreed upon. The contract states the purchase price and the completion date, agreed by both parties. When the contract is signed, 10% of the purchase price is paid to vendor. The reservation deposit already paid makes up part of this amount.
Be aware that if the buyer breaks the terms of the contract, the vendor is entitled to keep the 10%. If the vendor breaks the terms of the contract then the vendor must repay the buyer double the 10% deposit. This is a good way of ensuring that time is not wasted and that all parties are serious about the transaction. In practice, very few sales fall through after this point.
3. Costs and taxes
The costs of purchasing a property are around 10% of the purchase price and consist of the following:
• Notary fees: Approximately 1 % of the purchase price
• Lawyer’s fees: Approximately 1% of the purchase price
• Property transfer tax or VAT
a) When purchasing a resale property, a transfer tax is payable, of approximately 7% of the value stated on the Title Deeds
b) VAT is also applied to new properties at a similar rate of 7%
• Plus Valia tax: This is a small fee payable to the Town Hall
• This fee increases, the greater the property value
• Title Deed Value: this is 0.5% of the Title Deed Value
• Stamp Duty: this is 1% of the purchase price
All of this requires a Fiscal Identification number (NIE). Recent legal changes require you to have this number before you can purchase a property. This can be obtained with the solicitor and notary.
4. Completion
The new title deeds for the property will be signed in the presence of a notary. The buyers must also be there in person, unless a power of attorney is legally given to your lawyer/legal representative, who can then sign on your behalf. Once the vendor is paid, the new title deeds are signed and the new owner is given the keys, and at this point the new owner has full title and is the proud owner of a new property!
Please Note
This Buyers Guide page is intended as general information only, therefore Palma Property Finders cannot be held responsible for any of the information relating to the conveyance procedures, banking procedures, or any other legal processes in Spain and/or the Balearic islands. Should you choose to buy your property through Palma Property Finders, we will put you in touch with the necessary organisations and individuals required to complete your transaction. These will include banks, solicitors, notaries, accountants and any other local services that you may require. However, we are not in any way affiliated with any of these third parties, so we can offer you completely unbiased advice.
Mallorca buyers guide
When you've made a decision to purchase property in the Balearics, we strongly recommend that you use a lawyer from the local region.
We can assist you in this and can provide names of several who are also excellent English speakers. There are a number of stages and processes which need to be completed before you're ready to sip Sangria on your chosen terrace!
These are the four stages:
1. Choose the right property for your budget and practical requirements
2. The two mandatory contract Stages
a) Reservation deposit:
The reservation deposit secures the property, and the property is taken off the market for 2-3 weeks. The deposit is usually between 2000€ - 5000€ depending on the type of property being purchased. This period is essential and allows your solicitor to do the necessary searches, to make sure the property is safe to buy. The reservation deposit is refundable if the property turns out to be unsuitable or your finances alter before the purchase.
b) Option to buy contract:
When you have the sale go-ahead from the solicitor, an ‘option to buy’ contract is prepared and agreed upon. The contract states the purchase price and the completion date, agreed by both parties. When the contract is signed, 10% of the purchase price is paid to vendor. The reservation deposit already paid makes up part of this amount.
Be aware that if the buyer breaks the terms of the contract, the vendor is entitled to keep the 10%. If the vendor breaks the terms of the contract then the vendor must repay the buyer double the 10% deposit. This is a good way of ensuring that time is not wasted and that all parties are serious about the transaction. In practice, very few sales fall through after this point.
3. Costs and taxes
The costs of purchasing a property are around 10% of the purchase price and consist of the following:
• Notary fees: Approximately 1 % of the purchase price
• Lawyer’s fees: Approximately 1% of the purchase price
• Property transfer tax or VAT
a) When purchasing a resale property, a transfer tax is payable, of approximately 7% of the value stated on the Title Deeds
b) VAT is also applied to new properties at a similar rate of 7%
• Plus Valia tax: This is a small fee payable to the Town Hall
• This fee increases, the greater the property value
• Title Deed Value: this is 0.5% of the Title Deed Value
• Stamp Duty: this is 1% of the purchase price
All of this requires a Fiscal Identification number (NIE). Recent legal changes require you to have this number before you can purchase a property. This can be obtained with the solicitor and notary.
4. Completion
The new title deeds for the property will be signed in the presence of a notary. The buyers must also be there in person, unless a power of attorney is legally given to your lawyer/legal representative, who can then sign on your behalf. Once the vendor is paid, the new title deeds are signed and the new owner is given the keys, and at this point the new owner has full title and is the proud owner of a new property!
Please Note
This Buyers Guide page is intended as general information only, therefore Palma Property Finders cannot be held responsible for any of the information relating to the conveyance procedures, banking procedures, or any other legal processes in Spain and/or the Balearic islands. Should you choose to buy your property through Palma Property Finders, we will put you in touch with the necessary organisations and individuals required to complete your transaction. These will include banks, solicitors, notaries, accountants and any other local services that you may require. However, we are not in any way affiliated with any of these third parties, so we can offer you completely unbiased advice.
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