Author: Rosa T.
Profession: Lawyer
Completed cases: 563
Rosa T. has been helping English-speakers buy property in Mallorca over the last 15 years, and here she guides you on what you should and shouldn't do if planning on acquiring property on the island.

Mallorca, (also Majorca), is the largest of the Balearic Islands in Spain, situated in the Mediterranean Sea.

Boasting luxury villas, and indeed luxury apartments to choose from, Mallorca has established a reputation for attracting high-net worth individuals and families. Indeed, it is not uncommon to hear of people who buy property in Mallorca and then commute to work in the UK!

Great care should be taken if you plan to commute from Mallorca, since you could well be considered resident for the purposes of Spanish income tax!

If you are buying property in Spain and are particularly interested in Mallorca, below is a summary of some important issues that you should be aware of before placing an offer on any property.

buying a property in mallorca

1. The Mallorca property Market

The property market in the Balearic Islands has seen significant trends in pricing and foreign buyer activity as outlined in the most recent report from the Spanish Land Registries.

Foreign Buyers' Share of Market

There has been a sustained interest from international buyers despite a general slowdown in transaction volumes, according to figures from the Land Registries Association of Spain foreign purchases have remained considerably high, taking a 35.63% share of all property acquisitions by foreigners in Spain! This is significantly higher than any other region, underscoring the Balearic Islands' appeal as a prime location for investment and residential purposes by the international community.

The market dynamics in the Balearic Islands also reflect a trend where prices have progressively increased, maintaining their upward trajectory even as other areas have started to stabilize or decrease. This may be attributed to the enduring allure of the islands' lifestyle, climate, and amenities, which continue to attract a wealthy international clientele.

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Property Prices in Mallorca

During the fourth quarter of 2023, the Balearic Islands continued to exhibit one of the highest average property prices in Spain, at 3,496 euros per square meter. This figure not only tops the pricing charts when compared to other regions but also indicates a robust demand in this locale, particularly from foreign buyers.

In comparison, regions like Madrid and the Basque Country also reported high prices but were still lower than the Balearic Islands, with average prices per square meter of 3,280 euros and 2,912 euros, respectively. The contrast is even more pronounced when compared to the less expensive regions such as Extremadura, where the average price per square meter is significantly lower. 

In summary, the property market in the Balearic Islands stands out with its high property values and substantial foreign buyer interest. Despite broader market challenges, these islands have sustained their position as a top-tier real estate market within Spain, driven by continuous foreign investment and the inherent desirability of the location.

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Estate Agency Services
Estate Agency Services
Estate Agency Services

Who Can Benefit from this Service?

Estate Agency Services

This service is tailored for expats relocating to Spain who want expert assistance in navigating the Spanish property market. 

The real estate market in Spain has evolved a great deal in the last 15 years, because buyers have become more diverse and are no longer simply looking for a sunny retirement home or holiday villa - though these are still the most sought after properties.

As the work-from-home concept has taken root, more and more people from Northern Europe are considering a permanent move to Spain, and its year round sunshine.

So, whether you are looking for a holiday home or a permanent residence, our English-speaking estate agency partners around Spain will help to simplify your transition with their expert knowledge of local market dynamics.

Benefits - Why Choose Our Service

  • Personalized Property Search: Tailored options that match your specific needs, preferences, and budget.
  • Legal and Financial Guidance: Expert advice on Spanish property laws, tax implications, and financial considerations via Advocate Abroad's lawyers
  • Language Support: Overcome language barriers with our multilingual estate agents.
  • Local Market Insight: In-depth knowledge of various Spanish regions, ensuring you find the right location.
  • Assistance with Paperwork: Help with all necessary documentation, from initial offers to final contracts.
  • After-Sale Support: Ongoing assistance with settling in, including utilities setup and local recommendations.
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2. Can foreigners buy property in Mallorca?

Not only can they buy property in Mallorca, foreign purchasers have a larger share of the local market in Mallorca than anywhere else in Spain! This has caused some disquiet among some members of the local population.

Late in 2022, the regional government in the Balearic Islands - including Mallorca, Ibiza and Formentera - initiated a study to consider the prohibition from making a property purchase in the area, anyone who has not been a resident there for at least 5 years. However, such a prohibition is unlikely to survive legal scrutiny within the context of a fundamental pillar of the EU being free movement of people. As of April 2023, no such ban has been implemented.

Of course, if you are not an EU Citizen - or able to benefit from a family member being an EU Citizen, you will need to overcome the immigration hurdles, should you wish to spend more than 90 days in any 180 day period in your property in Mallorca. There are a number of visa options available, with the most popular - in terms of volume - currently being the non-lucrative visa and the relatively recent digital nomad visa.

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Get Health Insurance
Health Insurance
Get Health Insurance

What Does This Service Consist Of?

Health Insurance

We understand the unique needs of expats living in Spain. That's why we offer more than just insurance – we provide tailored health coverage designed to give you peace of mind and clarity, no matter where life takes you.

 

 

Personalized Assistance: Request a quote today and our dedicated team will guide you through all the details, ensuring you have a clear understanding of your coverage, including any exemptions, limits, or optional deductibles.

Expat-Friendly Services: Our policies are crafted with the international resident in mind, offering English-speaking support teams, documentation, and consultants to ensure you feel confident and informed, even in a foreign country.

Flexible Options: Whether you're starting a new chapter in Spain or already established here, our health insurance plans are adaptable to your needs, providing comprehensive coverage for individuals of all ages, including expats over 75.

Extensive Network: Gain access to a vast network of over 51,000 medical professionals and 1,000 centers, renowned for their expertise and commitment to excellence in healthcare.

Comprehensive Care: From routine check-ups and primary care services to specialized treatments such as radiology, chemotherapy, and physiotherapy, our policy covers a wide range of medical needs to keep you healthy and thriving.

Hospital Support: Enjoy peace of mind knowing that our policy includes comprehensive hospital services, including surgical interventions, ICU stays, childbirth assistance, and comfortable accommodations for you and your loved ones.

Medical Hotlines: Access round-the-clock medical support with our specialized telephone lines, including 24-hour doctor consultations and expert guidance on women's health, pregnancy, and psychological well-being.

Global Assistance: Travel confidently with our worldwide emergency assistance services, providing generous coverage limits and support wherever your adventures may take you.

Dental Benefits: Take care of your oral health with coverage for dental consultations, cleanings, and diagnosis, plus discounts on additional services to keep your smile shining bright.

Lifelong Security: Rest assured with our lifelong policy guarantee following the third renewal, offering continuity and stability in your healthcare coverage as you navigate life in Spain.

Please note that certain services may have minimum waiting periods before they become available, ensuring fairness and sustainability for all policyholders.

Choose our health insurance policy tailored for expats in Spain and embark on your journey with confidence, knowing your health and well-being are in trusted hands.

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Given the value of properties in Mallorca, a relatively higher number of golden visas (ability to reside and work in Spain at the holder's discretion on investment in real estate over €500,000) are issued here, though this visa may have its days numbered, according to recent government announcements of plans to withdraw this option.

So, assuming you have found a property you like, you are confident you will be able to stay in Spain sufficiently long to enjoy the property and you've made an offer on it, what steps do you need to take to ensure that you buy property in compliance with Spanish law?

best place to live in mallorca

3. The Buying Process in Mallorca

The process for buying a property in Mallorca is no different than anywhere else in Spain. We provide a detailed step-by-step guide on the process in our article: buying property in Spain

In the simplest of terms, once your offer is accepted by the seller, you need to sign a private purchase contract with all the purchase conditions. A deposit is typically required to take the property off the market. If you have hired a lawyer, he/she will be able to carry out the due diligence prior to signing the purchase contract. 

Once the private contract is signed, the next step is to arrange an appointment with a Public notary to sign the purchase deeds, then you pay the balance of the purchase monies and property possession is then transferred to the purchaser.

While this is a very simple overview, it is worthwhile to review the pitfalls of buying property in Spain and great care must always be taken to avoid costly errors.

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Property Survey Structural Report Service
Property Survey Structural Report
Property Survey Structural Report Service

Who Is This Service For?

Property Survey Structural Report

Anyone purchasing a property of any size is strongly advised to obtain a technical survey on the property. Often those buying property abroad are cash buyers and, as a result, are not required to obtain a survey of the property before purchase. Many don’t bother. We feel that this is a major error, since a survey could save you a huge amount of money in expensive repairs later on, and potentially allow you to renegotiate the property purchase.

Even if buying with a mortgage, any survey required by the bank will only include a valuation as well as any obvious and serious defects that would affect said valuation. Arranging a private survey provides much more information and will provide you with the information you need to be confident about the investment you are making in a foreign country. Quite simply one of the most important investments you can make regarding property!

What Does This Service Consist Of?

  • Initial consultation to discuss different surveys available: condition report, building survey or structural survey
  • Visit to property and compilation of report
  • Delivery of report in your language
  • Follow-up discussion as required to answer any additional questions you may have
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4. What documents do I need when buying a property in Mallorca?

To be able to buy a property in Spain, a tax identification number, or Spanish NIE number, is required. It is also advisable to set up a bank account in Mallorca, where you can transfer the purchase monies to before the signing of the public deeds of purchase.

buying a house in mallorca

5. How much deposit do I need to buy a house in Mallorca?

Typically, the buyer pays a deposit of 10% of the property value to the seller, at the time the pre-purchase or 'arras' contract is signed. The 'arras' is effectively a 'contract-to-contract' and it stipulates how much will be paid for the property and the date that the purchase must take place by.

Care should be taken and advice sought before signing this contract. For example, a deposit paid under an 'arras' contract should not be confused with a request from a real estate agency to pay a reservation fee. 

In fact, this fee is usually held by the agency in lieu of payment by the seller of the agency's fee, and guarantees the buyer precisely nothing in terms of withdrawing the property from the market.

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Apply for a Spanish Mortgage
Mortgage Service
Apply for a Spanish Mortgage

Holiday Home Mortgages

Mortgage Service

Whether you are buying a holiday home, permanent residence or even a commercial property in Spain, it can be necessary - and even tax efficient - to arrange financing. 

Unfortunately, for many foreign buyers, this can be problematic due to:

  • Dealing with incomprehensible and unending documentation requests,
  • Overcoming issues with not having a local credit history or suffering
  • At the mercy of the banks who know they are dealing with clients who have greater difficulty to ‘shop around’
  • Overcoming the language barrier

This is where our English-speaking mortgage brokers can really make a difference by leveraging established relationships with multiple banks and lenders in Spain to negotiate favourable terms for you and secure competitive interest rates for clients.

The mortgage brokers gather and prepare the necessary documentation, which can be particularly challenging for non-residents unfamiliar with Spain's bureaucratic requirements.

Ultimately, the mortgage brokers goal is to ensure that you get a much better deal, and by reducing the overall cost of repayment of your mortgage substantially, they more than justify their fee. 

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6. Can I rent out my holiday home in Mallorca to tourists?

As a result of Decree Law 03/2022, passed by the Balearics Parliament, a moratorium has been declared to prevent any further touristic licences being issued, including to Mallorca properties, for the next four years. This means that, unless the property you are buying already has had a touristic license issued, you will not be able to offer the property for holiday rentals.

balearic properties

7. If I sign a private purchase contract and change my mind, can I get the deposit back?

Should you decide not to go ahead with the purchase after signing the private purchase contract or option contract, please note you will lose the deposit. Likewise, if it is the seller who withdraws from the contract, they need to refund double the deposit received from the purchaser.

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Refurbishments & Extensions Service
Refurbishments & Extensions
Refurbishments & Extensions Service

Who Is This Service For?

Refurbishments & Extensions

Current homeowners and those planning to invest in a second-hand property may wish to extend or upgrade the property. Indeed it is often the case that buyers acquire a property on the basis that they will be able to extend or refurbish the property to make it suitable for their purposes.

Property extensions will in most cases require planning approval and the assistance of a local architect to whom you can convey your plans and obtain expert advice on the viability of those plans.

What Does This Service Consist Of?

  • Initial consultation to discuss plans and including expert advice on use of space, materials and compliance with planning regulations
  • Visit to site with assessment
  • Drawing-up formal plans
  • Making formal application for planning-permission where required
  • Management of project, engagement of builders and other tradesmen
  • Post-project Certification
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Yes, you can. You may appoint a lawyer or legal representative who can have all the relevant documents signed by you, with your presence on the island not being required. A Power of Attorney is mandatory in these cases.

moving to mallorca

9. What are the purchase costs when buying a property in Mallorca?

On top of the agreed purchase price, there are a few additional costs that the buyer must pay when buying a property in Mallorca. 

There is an 8-11% purchase tax (stamp duty) which varies depending on the purchase price. If the property is a new brand one bought directly from the developer, then there are two taxes: 10% VAT and 1.5% stamp duty (AJD). See more information in property taxes in Mallorca

As when investing in a property elsewhere in Spain, you must also consider the notary fees and property registry fees, which again depend on the purchase price. 

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Currency Exchange

Benefits of this Service

Currency Exchange

Every year we help thousands of individuals save money on their foreign currency payments for property purchase, emigration, overseas mortgage repayments, etc.

If you make or receive payments in a foreign currency, we could save you a great deal of money and make your currency transfers simple.

We guarantee much better exchange rates than the ‘tourist rates’ you would normally get from your bank and can save you up to 6% on currency transfers typically saving you £5,000 on a £100,000 transfer.

A is for Account:

Open a free account with us - Your account can be opened the very same day and you will be assigned a dedicated account manager.

B is for Better Rates:

Your account manager will keep you informed on currency market movements and get the best exchange rate for you at the time. Once agreed, this rate is then guaranteed for you.

C is for Currency Transfer:

Once you have paid for your currency we will immediately transfer the money to the bank account specified by you, anywhere in the world.

 

Benefits at a Glance

  • Highly competitive exchange rates
  • Quick and easy same-day transfers
  • Free tailored service with our currency experts
  • Dedicated Relationship manager
  • Safe & Secure transfers
  • Authorised by the Financial Conduct Authority
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In total, taxes and professional fees usually sum up to around 10-12% of the purchase price, including your legal fees, normally in the region of 1% of the purchase price plus VAT.  Just as would be the case in the UK, you will want to be be aware of the annual property tax payable in the area as well as any community charges also paid annually, if living in an urbanisation.

If the seller is a non-resident in Spain, then 3% of the purchase price must be paid directly to the tax authorities by the purchaser. Such tax payments should be handled by your solicitor

The property seller typically pays the Capital gains tax. the Spanish “plusvalia”, and the real estate agency fees.

 

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10. Top Tips on Buying Property in Mallorca

Sometimes these are relatively minor issues that are resolvable easily enough - once you are prepared to wade through the infamous local bureaucracy! However, other problems are much more serious, and I have seen some unfortunate people being ruined financially by an ill-informed house purchase in Mallorca.

Below I have laid out some tips on avoiding some typical problems that tend to arise when buying property in Mallorca as well as other more important matters to consider, that must be taken care of before proceeding with the exchange.

  1. DO ensure that the house complies with all the local planning regulations. It is not unusual to find in Mallorca houses, outbuildings, pools, porches etc… built without the required municipal licences, which can represent a serious issue for the potential buyer - such measures that could be taken by the authorities range from a ban on renovating the house or to do any more works on it, to a huge fine or even a demolition order.
  2. DO request an inventory of furniture and a snagging list. If the house is sold furnished and, in particular, if you are paying extra for this, then our advice is that you request a detailed inventory of all the items that will be sold with the house. Likewise, and since properties are often sold as seen, we strongly recommend that all our clients get the house inspected by a surveyor so that this professional can ensure that it is in good condition and/or can draft a snagging list for any defects that should be fixed before the purchase -i.e., stains of humidity, broken tiles, a/c not working properly etc.…
  3. DO request a “Nota simple” or Land Registry certificate. A land registry certificate is a document issued by the land registry where the house is registered. It not only contains a description of the house or the land where it is built on, but also a list of the mortgages and charges attached to it.
  4. DO inspect the house one more time before the purchase date. This is highly advisable. Although real estate agents often offer this service at no cost to the buyer, since they are mostly paid by sellers, it is always a good idea to confirm with them, directly or through your Spanish solicitor “abogado” that the house is sold in the same condition as when you visited it.
  5. DO NOT pay any money or deposit in advance before due diligence and before the signing of a deposit/option contract, including all purchase conditions. During many years of practice as a lawyer, I have seen people often advancing money to the vendor “to secure the house” before even knowing its condition or charges that might be attached to it, or before having reached an agreement on the final purchase price. It is also highly advisable to have the deposit transferred into an escrow* account, with most of the Public Notaries in Mallorca providing this service for a small fee.
  6. DO NOT buy a house for which a mortgage is required before your loan has been approved by your bank. When a mortgage is required to complete a purchase, we strongly recommend signing an option contract subject to mortgage approval, so that the purchaser may recover the deposit or withdraw without penalty in case that for some reason the mortgage application does not go through. We also recommend exploring your financial options with your bank to have all the information that is required before considering buying property in Mallorca.
  7. DO NOT assume that any real estate agent involved in the conveyance will work for you or will assist you throughout the whole purchase process. Whilst most of the real estate agents in Mallorca are experienced professionals and know the market and the sales/purchase process very well, and they normally do not mind giving the buyer some advice, they are usually instructed by vendors. So, if you are not the vendor, if you do not have an estate agent working for you exclusively, and if it is the first time that you are carrying out a property purchase Mallorca, we strongly recommend that you use your own solicitor on the island.
  8. And finally, DO NOT sign any document that has not been previously translated to a language that you understand. Note that English is not an official language in Spain, so the vendor is not obliged to translate any contracts or documents produced in Spanish or in Catalan (also known in its Balearic version as Mallorquin) into other languages.

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NIE Express

Who Is This Service For?

NIE Express
  • For anyone who needs to arrange an NIE (Foreigner Identity Number) in Spain fast!! 
  • Whether for purchasing property, inheriting assets, establishing a business, or paying taxes, the process can often be time-sensitive and require minimal hassle.
  • However, this is where the challenges arise. The NIE application process is overseen by the Spanish National Police or diplomatic services, and as a result, it is typically a slow procedure that can take weeks or even months to complete. 
  • This delay can prove costly for individuals who urgently need to address business or personal matters.

Requirements

Requirements and Conditions:
To apply for a Spanish NIE number, certain requirements and conditions must be met, including:

  1. Not being in an irregular situation in Spain.
  2. Clearly stating the reasons for requesting the assignment of the NIE.

Procedure

  1. The NIE can be obtained in person at the request of the interested party. 
  2. The application can be made directly through the General Directorate of the Police, or it can be submitted through the Foreigner's Offices or Police Stations. 
  3. If the foreigner is not in Spanish territory at the time of the request, the NIE can be requested through the General Directorate of Immigration and Borders, via the Spanish Consular Offices abroad.

Required Documents:
When applying for an NIE, the following documents are typically required:

  1. Completed NIE application form (Form EX15), including personal information.
  2. Identification document from the foreigner's country of origin or passport (original and copy of all pages).
  3. Passport-sized photograph.
  4. Document certifying the reason for requesting the NIE.
  5. For EU residents, proof of residency in Spain is necessary, while non-EU foreigners need to provide proof of entry into Spain.

Benefits

  • Fast NIE Service: - obtain an NIE number in days rather than weeks
  • No need to queue at the local Foreigner's office - all is managed with the simple signing of a Power of Attorney which can be completed in less than 5 minutes at a local notary office
    For those seeking to obtain an NIE quickly, there is a service available that can expedite the process. This service typically includes the following steps:

What Does This Service Consist Of?

  1. The service starts with an initial phone call or office consultation to explain how the service works
  2. Dual language power of attorney provided to you for local notarisation and legalisation wherever you are located and then can be sent directly to our lawyers
  3. Once we receive the paperwork from you, together with payment for the service, your NIE number(s) will be ready within a few days!
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Our Lawyers

Rosa, Lawyer in Mallorca ...
Rosa is an experienced and highly sought-after English-speaking lawyer who provides expert legal advice and assistance in the following legal areas: Property conveyances, Inheritance, Family law, Criminal law, Business set-up and Employment law.
Efficient, responded quickly, advised clearly and completed the work both diligently and friendly. Highly recommended.
Martin Warner
Martin Warner
08 May 2024
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563 completed cases
Speaks languages
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