Buying property in Mallorca: how a purchase works.

Who can buy in Mallorca?

Anyone. Foreigners can buy property in Mallorca, whatever their nationality or country of residence.

• You need an NIE, the Spanish identification number for foreigners. Without it you can neither pay the taxes nor register the purchase.
• A ban on purchases by non-residents is debated politically from time to time, but none is in force.
• For buyers from outside the EU, land outside built-up areas may require a military permit. Your lawyer checks this.

How does a purchase work?

1. Checks: the land registry extract (nota simple) showing owner and charges, the cadastral data, the building licence and certificate of habitability and, for apartments, the documents of the owners’ association. Your lawyer normally does this.
2. Preliminary contract: often a contrato de arras with a deposit of around ten per cent.
3. Notary: ownership passes with the deed of sale (escritura pública). You pay the balance and receive the keys.
4. Afterwards: the taxes are paid and the purchase is entered in the land registry.

In the common form of preliminary contract (arras penitenciales, Art. 1454 of the Civil Code) the buyer loses the deposit on withdrawing. If the seller withdraws, the seller repays double.

Buying costs: which tax applies?

Which tax applies depends on what you buy and from whom. Resale property is subject to transfer tax (ITP), which is banded in the Balearic Islands. Each rate applies only to the part of the price within its band: on a price of €1 million that comes to €90,000.

Instead of transfer tax, or in addition

• New build from the developer: 10% VAT (IVA) and 1.5% stamp duty (AJD), or 2% stamp duty from a price of €1 million.
• Building plot sold by a company: 21% VAT, again plus stamp duty.
• Notary and land registry: together normally well under 1% of the price.
• Lawyer: usually around 1% plus VAT.

Rule of thumb for houses and apartments: buying costs of 10 to 15% of the price. For a building plot sold by a company they are higher because of the VAT.

What does the property cost afterwards?

• Municipal property tax (IBI), every year
• Refuse charge
• Owners’ association fees, for apartments and developments
• A non-resident tax return, every year, even if you only use the property yourself
• Wealth tax, depending on your assets

A tax adviser will work out the figures for your case.

Building plot with preliminary project: what does the price include?

Some of our listings are building plots with a worked-out villa project.

• Included in the price: the plot and the preliminary project.
• Not included: further planning and construction.
• The bedrooms, bathrooms and areas shown are the planned figures of the project, not those of a finished house.
• We tell you the status of the permits for each plot.

Buying directly from Predator SL

• Our own properties: we develop and build them ourselves and sell them ourselves.
• No commission for buyers.
• Which tax applies, transfer tax or VAT with stamp duty, depends on the property. We tell you on request.
• Reservation and deposit are arranged per property, and we send you the documents.

How buying from Predator SL works

1. EnquiryYou write to us through the form on the listing, or call.
2. ViewingWe show you the property or the plot on site.
3. Documents and checksYou receive the documents for the property and your lawyer reviews them.
4. AgreementReservation or preliminary contract with a deposit, depending on the property.
5. NotaryDeed of sale, payment of the balance and handover.

Frequently asked questions about buying