TO DO LIST
BUYING PROPERTY IN MALLORCA
This document has been prepared, in good faith, purely for your help and it is not for public distribution. It does NOT replace the professional advice that you should seek from a lawyer before buying your property in Spain.
Spanish legislation relative to the whole process of buying property in Spain is continually being updated.
Consequently, this document should be interpreted as an “additional” guide to help you understand the basic steps of successfully buying a property in Spain.
THE RIGHT PROPERTY
It is currently a “buyer’s market” in Mallorca. As with most places around the world, there are more people who want to sell than there are those who want to buy, so there is a lot of property for sale. Finding the right property for you can be time consuming. It may be lovely to view a property with a Jacuzzi, but if you have never used one before and are not likely to start using one, why waste time with a viewing?
Take time to prepare yourself a “wish list” which contains those aspects of a property that are important to you.
- Number of bedrooms, sea views, parking facilities, pool, lift access, proximity to shops.
- Are you intending to live in the property full time or use it as a second or holiday home?
The more research you carry out, the better prepared you will be and less likely to waste your time viewing properties that are simply not suited to your requirements.
“OPTION TO PURCHASE” CONTRACT
Once you have found the right property, and, assuming that you are not quite ready to go to the Notary that same week to complete the sale, the next step is to show your commitment to the purchase. This is done by signing a legally binding document that confirms all the agreed details of the sale by signing a private
“Option to Purchase” contract. This contract will confirm:
a) The buyer’s identity - agent will need a photocopy of your passport
b) The seller’s identity
c) Details of the property and what is included in the sale, which should include a photographic inventory, and Land Registry details
d) The total price of the purchase.
e) The amount of the deposit to be paid at the time of signing the contract. The deposit to pay is usually around 6% of the purchase price and ideally should be paid on the same day as signing the contract, certainly no later than seven days afterwards.
f) The contract will also specify the “Limit Date” - by which the sale must be completed by signing the transfer of the title deeds (Escritura) at a Spanish Notary Office.
NIE (Numero Identificación Extranjero)
Anyone who is to be named as the property owner or want to work in Spain will need to have an N.I.E. number to be registered with the Spanish Government.
The number remains yours for life for as long as you have any asset in Spain and is used for any transaction i.e. work, paying taxes, buying a car, or a boat etc.
You can get your N.I.E. in a number of different ways.
You can do this yourself by going to the office in Palma.
Take your passport with you and a photocopy as well.
You have to book an appointment first online through the link shown below.
Depending on the time of year, your appointment could be allocated in a number of days or a number of weeks.
WEB SITE FOR APPOINTMENT:
- Choose “Illes Balears”
- Click “Aceptar”
- Choose “Asignación N.I.E:”
- Click “Aceptar"
- Click “Entrar” (Bottom of page)
- Fill in Form :
- Choose “Pasaporte” (Input your passport number)
- Fill in your name exactly as it is on your passport.
- Pais de Nacionalidad = Choose “Gran Bretaña” (if you are of British Nationality).
- Click “Aceptar”
- Click on “Solicitar Cita” (Requesting appointment)
- Confirm the office you wish to attend (There is only 1 option Felicià Fuster)
- Click on “Siguiente”
- Input Telephone number and email address as requested
- Click on “Siguiente”
- You will then be presented with a calendar where you can choose a day and hour for when you want the appointment.
You then click on this link and fill in the form and print it out: Form for NIE number
- You go to the office with your passport, copy of passport, the filled in form above and a copy of the document for your appointment.
- You should at least speak some Spanish, or bring someone who does.
- Adress of the office is to go: Oficina Unica de Extranjeria, Poligono Levante
C/ Ciutat de Queretaro s/n, 07007 Palma de Mallorca
- You can’t pay this in the office, it has to be done in the bank by using a form known as: Modelo 012 “Asignación de Número de Identidad de Extranjero (NIE) a instancia del interesado” (You get this form in the office to go to one bank).
- There is a minor administrative charge that you have to pay in the bank to get the NIE.
- After you have been in the bank you go back to the office with the document from the bank with a stamp that you have payed.
- You then get your NIE number document with witch you now can open bank account, buy property etc. and you have your NIE number for life.
You can get an NIE number by going to your nearest Spanish Embassy in your country of origin. Again you will need to take your passport and a copy of it with you.
Pay a professional “Gestor” in Mallorca to do this for you. Takes around 2 to 3 weeks. Costs around 160Euros for each NIE number required.
I can recommend one in Palma Nova (see below). But first you will need to get an official copy of your passport signed by a Notary.
Don Raymundo Fortuñy Marques,
Edificio (antiguo Club de Hielo) - Opposite Lidl Supermarket, Ground Floor
Calle Cordoba, 7, Palmanova. 07181 * Phone: +34 971 680 688
Open 9am to 2pm only.
In the same building you can find the office of the Gestor Sr Jaume Bibiloni.
Different entrance, main doors, large glass doors to his office. To the right when you are inside main entrance of building, big orange Logo.
Mallorca Business Centre. * Phone: +34 971 699 985 (Secretary = Andrea)
You can’t buy a property in Spain without an N.I.E. However, in many cases it is possible that the Notary will obtain this number for you, especially if you have instructed the Notary to “process” the deeds for you. (see notes on buying costs below).
The owner of a property is the “Title Holder” (Titular) of the property and this is shown in the “Title Deeds” document, known in Spain as the Escritura. When the property is sold from one person to another, the “Title” also changes and this is witnessed by a Notary and is known as the “Transmision Publica”.
Details of this “Transmision Publica” are registered in the official Land Registry – Registro de Propiedad.
COMPLETING THE PURCHASE – TRANSMISION PUBLICA.
Once you have signed the private “Option to Purchase” contract and paid your deposit, the next step is to complete the sale at a Notary Office. The agent will communicate with you regularly and co-ordinate a date and time for all parties to meet at the Notary office.
The agent will prepare all the necessary paperwork for the Notary usually a couple of weeks in advance.
This will include:
a) Certificate from the Community Administrator confirming that the property being sold has no debts with the community.
b) Copy of the latest council tax receipts (IBI) – this proves there are no debts with the local council.
c) Certificate from the Land Registry which will show details of any third parties that may have an interest on the property ie, a bank that may have a mortgage registered with the property.
d) Photocopies of the ID of all parties, passports and either NIE numbers or Spanish ID numbers.
All of these documents are rechecked by the Notary on the same morning that the purchase is due to be completed.
You become the legal owner of your property once the transfer of title has been completed in the presence of a Notary. You are not the owner before this moment, so please do not ask to stay in the property before everything is formally signed over to you. The seller is perfectly within his right to refuse possession until the deeds are signed. If you are travelling from abroad make sure you make adequate arrangements for accommodation prior to the Notary day.
When the purchase of your property is completed and the transfer of “Title” has been done by signing the “Escritura” at the Notary office, you will be given a photocopy of the document you have signed. This document is known as the “Copia Simple” of your Escritura.
The original “Escritura” document physically has to undergo an administrative process via various official departments – this process costs money.
As a rough guide, buying a property without a mortgage will incur costs of approximately 10% - 12% on top of the agreed purchase price. Whoever processes the deeds for you will prepare an estimate of the costs and you will be required to pay this initial estimate usually on the day of completion. The payment is used as a deposit to cover the following costs:
a) 8% - Tax, or stamp duty, this is paid to the central Spanish Tax Office - “Agencia Tributaria”
b) NOTARY fees – The Notary is an independent professional responsible for overseeing the transfer of the deeds (Escritura). The Notary is present on the day of completion “Transmision Publica” to protect the interests of both the buyer and the seller.
c) REGISTRO PROPIEDAD – Land Registry Fees – After the signing of the title deeds, the property then has to be registered in your name at the local Land Registry Office in Calvia.
d) GESTORIA FEES – The tasks described in (a) and (b) above are normally carried out by a Gestor or your lawyer, who will charge a fee for doing this work for you. Many Notaries will also offer this same service of “processing” the deeds for you.
The original copy of the deeds will be returned to you normally within a maximum of three months. When you receive your original copy of the deeds you will be provided with an exact breakdown of each individual cost. If there is any money left over from the deposit you paid on completion, then this will be returned to you. However, it is sometimes the case that your initial deposit was not enough to cover all the costs and you may find you have to pay a small amount more.
The deeds (Escritura) returned to you will have a number of additional documents attached to it:
(a) Copy of receipt for the 8% Stamp Duty from the tax office (Agencia Tributaria),
(b) Certificate signed by the Land Registrar confirming the property has been registered in your name in the local Land Registry Office (Registro de Propiedad)
(c) The final bill (Factura) presented by your Gestor/Lawyer or Notary detailing all the fees that have been paid.
If you are going to buy a property with the additional help of finance from a Spanish bank, ie with a mortgage, then your buying costs increase, sometimes up to 16%. This is because there are TWO Escrituras to process, ONE between you and the seller, and ANOTHER Escritura between you and the bank, this is to formally register the finance that has been provided for you.
ONGOING COSTS FOR OWNING A PROPERTY IN SPAIN
Owning a property in Spain is actually relatively cheap compared to other European countries.
a) COUNCIL TAX & RUBBISH COLLECTION TAX
Council Tax (Impuesto sobre Bienes Inmuebles – IBI) and the Rubbish Collection Tax (Tasa Basuras) is paid once a year and applies to the period from the 1st January to 31st December. In the borough of Calvia you can pay this in person at the “Oficina de Recaudacion” opposite the Town Hall (Ayuntamiento). The time within which you can voluntarily pay this is between the 1st June and 31st July. You can make arrangements to set up a Direct Debit authorisation from your bank account. The council will charge this cost directly to your bank account usually in the first couple of weeks of July. If you do not pay this on time the Council currently apply a 20% fine.
b) WEALTH TAX – DECLARACIÓN DE RENTA
By virtue of the fact that you are a property owner in Spain – even if you do not live in it, you still have to pay a tax on this property every year to the Spanish Government. The amount of tax that you have to pay varies and depends on many factors. You should assign a GESTOR or LAWYER to be your legal or fiscal representative in Spain so that they can do this for you once a year.
c) COMMUNITY FEES
If you buy a property that forms part of a complex, ie an apartment in a block or a house within an enclosed complex, then you will have to contribute towards the cost of maintaining the communal elements that are shared by all the properties. Your deeds will specify to you the percentage that your property has to pay towards the community’s expenses. Community expenses vary from year to year depending on what maintenance work is carried out by the community. The more “services” (eg, pool and lifts) the community has, the more expensive the costs will be – but also, the more properties that there are within the community so you have more people to contribute towards that expense. The community costs are paid in many different ways. Some communities agree a budget in advance and pay it once or twice a year, other communities pay their expenses as they occur, usually every two months or quarterly.