Buying Property in Mallorca
It’s everybody’s favourite holiday island, but Mallorca has offered much more than a fortnight in the sun for successive waves of settlers for the last 5,000 years. Today’s new residents are part of a society that is the wealthiest in the whole of Spain. That fact is reflected in the property prices and the now-controlled residential development regime on the Island.
Mistakes of the Sixties and Seventies tourism boom, that sent high rise condos and hotels shooting up along many of splendid beaches in the south will not be repeated, and restricted supply of newbuild homes – and the resultant high prices - will avoid mass residential invasion.
The string of beaches, spoilt and unspoilt resorts and villages are the pearls in the coastal necklace and the focus for package holiday and residential tourism. Inland is the haunt for the culture buffs, hikers and mountain bikers and for wealthy families from Germany, Britain and Scandinavia who enjoy a lotus eating life in the sun with their Mallorcan neighbours. They enjoy a full social calendar with a continuous round of festivals, carnivals, saints’ and sports days with an emphasis on classical music, a legacy from the notable sojourn of composer, Frederick Chopin.
That Palma Airport is one of the busiest in Spain and Europe means there are cheap, plentiful flight options for property buyers and the families to whom they rent out their apartments and villas. With Spain’s Royals, Hollywood and Rock stars summering on the Majorca, it's an island that has something for everyone. On offer for property buyers is a range of upmarket condos close to great beaches, sea view villas perched on inland bluffs or cliff tops and hinterland farms with lots of land, olive and fruit trees. Those buildings that are in need of much TLC are not cheap, but seem so when compared with some of the magnificent refurbished finca estates, like that of Christopher Columbus’s family who moved into the Mallorca's oldest property in AD500. It was sold recently through Property in Spain.
Start buying property
In Spain there are many options when purchasing your property:
- Through a local Estate Agent
- Property searchers
- Using the services of a Solicitor ('Notario')
- Buying a new build
For those who don’t speak fluent Spanish, the option of using an estate agent is generally preferred. Estate agents are known as Immobiliarias in Spain and they are only lightly regulated by the government so make sure that the agent you work with displays knowledge of the market and works in a professional manner. Most are multi-lingual and they tend to be regionally based ie agents in the south west will only sell properties in the south west. The price of properties that are advertised with an agent generally already include their agency commission fees (usually around 5%). This is important to know when it comes to fees & taxes, as these should be based on the cost of the property only. Note also that a property may be offered by more than one agent and the asking price may vary – this can be a reflection of commission charges or simply that the vendor is trying his luck!
Property searchers will look at properties that are within your price range and match your requirements. Most will offer a personal service, taking you to view the properties they have short-listed. Some property searchers charge a fee while others prefer to take a percentage commission from the Inmobilario instead.
A public official known as a 'Notario'. They are highly qualified in the Spanish legal system and have been given powers by the State to legalise property purchase transactions that cannot be enforced by any other means. their responsibilities include conveyance, preparing the various documents and confirming the seller's title to the property, checking that there are no other mortgages on the property, etc. The notary is responsible for the legality of all documents that are signed before them in their personal capacity, which provides a guarantee for the client.
New build & developments
If you are buying a new build off-plan, you are more likely to deal with the developer themselves rather than the agent (who may only be involved at the introductory stage). It’s worth doing some research on the developer to see what kind of properties they produce, and whether issues & complaints have arisen from previous developments.
The buying process in Mallorca can be a bureaucratic affair and it is strongly recommended that professional advice, in the form of independent property lawyers, is sought. Beware of lawyers recommended by the estate agent as there may be a conflict of interests should a dispute arise between yourself and the agent. Ensure that your lawyer is registered with Bar Association (Colegio de Abogados).
As a foreign property owner in Spain, you will need to obtain a NIE number – this is a ‘foreign identity number’ which is required to pay your property taxes. Your lawyer can apply for one on your behalf or you can contact the Spanish authorities yourself – the process can take anything from two to six weeks. Your lawyer will help you with the contracts, payments, look out for all your interests and register your property for you at the Land Registry. Lawyers typically charge 1.0% to 1.5% of the property price, or you may prefer to negotiate an hourly rate.
It is advisable to explore your mortgage options before you start your property search. This way, you will be under no time pressure to find the best mortgage for your circumstances and this will save you money in the long run.