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Purchasing a Property
| PURCHASING A RESIDENTIAL PROPERTY ON THE ISLAND OF MALLORCA
The following information is a guide to the procedure for buying a property in Mallorca. Whilst we have been thorough with our research and information this does not substitute professional or legal advice from a qualified expert. We suggest you use a lawyer and will be pleased to provide you with a list of English speaking lawyers. Once you decide on a property and your offer is accepted a deposit is required to secure the property subject to the signing of an option agreement. At this stage it is prudent to instruct a solicitor who will check the option agreement, make all the necessary searches, handle the payments and apply for your NIF number (Fiscal number without which no contracts can be completed) The searches made by your solicitor are very thorough and no sale on a resale property can be completed until the following have been done:
For a new build property or off-plan no purchase will go ahead until your solicitor has checked:
AT THIS POINT YOU ARE COMMITTED TO THE PURCHASE. We advise money transfers are made through a licensed foreign exchange dealer who will give a better exchange rate, charge less for the transfer and act more speedily. All 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 (or his representative who has Power of Attorney) 2. The Seller 3. The bank which is giving the mortgage 4. The bank that is liquidating the mortgage. The notary is a public official whose duty is to ensure the final legal transaction is carried out. The Notary puts on public record the title deed recording the sale/purchase has been signed in their presence and understood by both parties. You will receive a copy of the title deeds. Your lawyer will present the original to the appropriate land registry and registration will be complete. A GUIDE TO COSTS AND FEES The following is only a guide, but is a reasonable summary of costs you will entail RESALE PROPERTY - 7% TRANSFER TAX NEW BUILD - 7% TRANSFER TAX + 0.5% STAMP DUTY PLOT OF LAND - 16% VAT + 0.5% STAMP DUTY NOTARY /LEGAL COSTS - 1-2% Inc municipal tax, legal fees etc. NB If you assume legal fees and taxes will be 10% of the purchase price of the property this will ensure your budget is correct and you will even have change! Lawyers fees - Usually 1% of the purchase price which will include the opening of a bank account, application for NIE, change of utilities, setting up direct debits for payment of utilities and the writing of a Spanish will. FINANCE If you require a mortgage for a purchase in Mallorca. As a non-resident you are usually allowed to borrow up to 70% of the purchase price or valuation, whichever is the greater. Mortgages can be arranged in Mallorca through a Spanish bank or an English bank based in Mallorca. Strictly Mallorca is happy to assist you by introducing you to banks we deal with on a regular basis. Alternatively, your solicitor may be able to advise you of the best deals and can arrange the finance for you. The procedure is very uncomplicated and usually takes 6-8 weeks depending on receipt of your NIE number. |