Mallorca Property Buyers Guide

Mallorca is one of the most beautiful islands in the Mediterranean with a stunning coastline and spectacular countryside and mountain scenery, making it a delightful location for buying a holiday home or a property for more permanent residence. With idyllic white sandy beaches and blue Mediterranean sea, constant sunshine and a wealth of mouth watering local and international restaurants together with the excitement of the cosmopolitan city of Palma, it’s no wonder that thousands of those who visit wish to buy a property in order to return and spend much more time here.

The array of exciting leisure activities in Mallorca is endless with 22 golf courses, over 25 marinas and glorious beaches offering a multitude of water sports and activities. In addition you can choose from hot-air ballooning, abseiling, mountain climbing, diving, go-kart racing and quad biking, water parks, horse riding and much more.

Where should I buy?

Unless you know the Island well, the first question any potential buyer asks is where should I buy in Mallorca. Whilst not a large Island, Mallorca does enjoy a diversity of terrain and even climate, so there are many considerations to take into account, coast or countryside, lively resort or sleepy village, amongst my countrymen or as far away as possible!

Here at Mallorca Sotheby´s we have Real Estate professionals who have lived on Mallorca for many years and know the Island well, who can advise any potential buyer of the areas to consider that suit their particular requirements and budget.

What sort of property should I buy?

This is where our expertise can help you decide on the right property to suit – are you planning to spend a lot of time on Mallorca or just the summer months? Will you be entertaining family and friends, or is it to be an escape from a hectic lifestyle?

What is your budget? Just a few of the points you should consider, but our Real Estate professionals will be pleased to guide you in the right direction and show you some suitable properties from which to choose.

What is the buying procedure?

Buying property on Mallorca is very straightforward and when you buy with Mallorca Sotheby´s International Realty you can rest assured your purchase is handled professionally and correctly. Our experienced team deal with both buyer and seller when handling negotiations and help with any other questions.

There are three basic stages of the purchase:

• Reservation Agreement & Deposit
• Buyer and Seller sign a simple reservation agreement and the buyer pays a modest reservation deposit as a gesture of good faith. This confirms the agreement of buyer and seller, subject to the property searches and takes the property off the market, keeping it reserved by the seller for the buyer for an agreed period during which the lawyers will have prepared a Private or Option Contract.
• Private or Option Contract
• When lawyers have confirmed that the legal position of the property is in order, the Private or Option contract is drawn up and signed by both buyer and seller. If any irregularities have been discovered, the buyer can withdraw and the reservation deposit returned.
  If all is well it is usual for 10% of the agreed purchase price to be paid by the buyer. This contract is binding on both parties and if the buyer withdraws he forfeits the deposit.
• Completion
• Completion of the purchase takes place at a notary where the deed of conveyance “Escritura Publica” is signed by both parties, the balance of the purchase price is paid and the buyer takes vacant possession of the unencumbered property. Your lawyer will then lodge the deed at the property registry to assure legal title.

What are the buying costs?

As a rule we recommend allowing 10% of the agreed purchase price to cover all your buying fees and taxes, around 2% more if you are obtaining a mortgage. The costs are generally:

• Transfer Tax
  This is 7% for resale property. There is no Transfer Tax for new homes, which instead are subject to 8% VAT (IVA) plus 1% stamp duty. For plots, commercial premises or garages this rises to 18% VAT (IVA).
• Notary and Land Registry fees:
  Fixed by law on a sliding scale, around 1% to 1.5%.
• Lawyers fees:
  Around 1% of the purchase price.
• Mortgage fees:
  An arrangement fee of around 1% of the advance is typical. In addition mortgages are taxed , at around 1.5% of the advance.

On-going support

After the purchase, Mallorca Sotheby´s International Realty will always be available for clients to offer any help we can. Usually your lawyer will arrange to change the utilities into your name together with the Town Hall taxes, such as the I.B.I (local community taxes) and the Basura (rubbish collection). Equally, if the property is within a community, there will be community fees to pay that vary according to each community. For advice on insurance, tax, banks, finance or indeed any aspect of living on this wonderful island we can introduce you to the best people who will be able to help and guide you.