Welcome to Home Finder Mallorca
'Home Finder Mallorca' are an affiliate division to 'Business Finder Mallorca', legally registered in Spain and backed by over 21 years experience in dealing with all manner of property & business transfers, purchases & valuations.
Buyers Guide
Purchasing a Property
Upon finding your dream home and agreeing the purchase price with the vendor it is important to take professional advice to ensure the vendor is the true owner, the property is legal, and there are no debts, charges or other legal encumbrances that could be passed on.
It is common practice in Spain to dispense with the services of a lawyer (abogado) as the buying process is normally straightforward but we consider this most unwise, especially for a first time buyer abroad not speaking Spanish.
There is a statutary 10 year guarantee on new properties, and always the option to ask for a survey on resale homes although is rarely taken.
Financing
Options are cash, financing from your home country (usually via a second charge on an existing property), or through Spanish banks who will be keen to offer you a mortgage (hipoteca) with competitive rates and conditions - they appreciate your business.
Larger property developers often have their own 'in-house' finance schemes.
Normal Spanish mortgage terms are around 60/80% valuation with a 15/20 year repayment period and current interest rates possibly as low as 3.5 / 4.5%. The formalities are fairly simple with the banks asking far less personal information than you would be used to at home with the larger decision to lend perhaps based more on the valuation of the property than your credit history.
Mortgages with a Spanish bank can often be confirmed within 7/10 days.
Contracts
A 'pre-sale contract' will be prepared and a deposit (normally 10%) paid to take the property off the market. The contract will set out the conditions of purchase, what is included in the price, the payment schedule, who is responsible for the transaction costs and any 'subject to' conditions if appropriate.
This contract is legally binding to both parties with the purchaser forfeiting the deposit if he changes his mind, and the vendor liable to pay back double the deposit if he himself changes his mind.
Legal Work
Your lawyer will apply for your NIE / fiscal number (numero de identification de extranjeros) which is essential for major purchases and tax payments, obtain a copy of the escritura from the 'land registry' to prove ownership, and the nota simple to check mortgages or other charges against the property. If a resale property then he will ask for the last receipts of the property and wealth tax as these can be passed on to the purchaser if unpaid, and if purchasing from a new development the deed of declaration of the new construction, the construction licences and occupancy permission.
He should also check if the local authority planning department has any development plans in progress that may affect the area where the property is located.
He will check the catestro certificate which is the legal description of the property, land & boundaries, and if community charges apply then ask to see that these are paid to date.
Taxes
The rule of thumb is to allow an additional 10% of the 'declared' purchase price to cover the transfer tax (impuesto sobre transmisiones), notario and lawyer fees.
The transfer tax for Mallorca is calculated at 7% of the declared purchase price on the escritura for a resale property, or IVA (impuesto sobre el valor anadido) at 7% + 0.5% stamp duty if buying a new property from a developer, or 15% if purchasing a building plot. Then we have a tax (plus valia) based on the increase in the value of the land since the last sale.
The notario will charge approx 2% including some tax & registration fees, and your lawyer around 1%.
Ongoing Fees, Annual Taxes & Utilities
Apologies to any of our site visitors from abroad (or indeed Spain itself) if we refer on occasion to home, the UK or England but as the site is written in English it seems natural to do so. Our multi-lingual staff welcome visitors from all over the world in your own language wherever we can - speaking Castilianio, Catalan, German, French, Italian & even Filipino!
If your property is part of an apartment complex or urbanisation then community fees will be charged to cover the cleaning, maintenance, lighting and upkeep of the common areas , swimming pools & gardens. Electricity and gas will be cheaper than in the UK and water normally metered so you only pay for what you use. Telephone and internet connections are right up to date with the latest technology.
The above information is intended as a guide only and should not be taken as a substitute for qualified legal advice as property laws in Spain can change from area to area and time to time.
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