Buying an apartment in Majorca
Buying a house in Mallorca
If you are thinking of buying a property in Mallorca, it is important to know bureaucratic procedures beforehand.
Firstly, you must have a valid identity document. Either the DNI, if it is a Spanish citizen, or the NIE if it is a foreign citizen whether resident or not in Spain. The NIE is the Foreigners Identification Number, which will be provided by the National Police, Aliens Office in Calle Feliciá Fuster, 7 in Palma (Google maps: 39.563795, 2.664445).
This document will be necessary for any economic transaction that a foreigner wants to carry out in Spain and must be accompanied by a valid passport.
When buying, you must also open an account in a bank with an office in Spain, so that cheques can be issued in the name at the time of purchase. In the case of a bank with a local branch, they are payable within a maximum of 2/3 days, while a cheque from a foreign bank without an office here can take up to a month to cash. For this reason, the seller will demand a check from a bank with an office open in the territory in which it is purchased. Payment can also be made by transfer. But this implies that the transfer must be made before the signature and carry proof of having made it in advance. As a general rule, the buyer prefers to issue the corresponding cheques and to make delivery at the time of signing before a Notary Public. The costs incurred by the issuance of checks or transfers are borne by the buyer.
To open a foreign bank account, you will need to present the NIE accompanied by a valid passport.
COMMITMENT TO SELL
It is a private document signed by buyer and seller, in which they fix the conditions of the sale, price, documentation to be presented, etc. It also establishes the date of the signature in the Notary and the possible penalties to be applied in the event of non-compliance by any of the parties. This contract establishes the payment of an amount (generally 10%), as a deposit (Purchase option premium or Deposit depending on the type of contract-Purchase contract; Purchase option contract; Deposit contract) that will form part of the total price.
This document has penal validity, even if it is a private document, and even so there are times that buyer or seller prefer to raise it to Public before Notary and Register it with the consequent fiscal obligation of payment of the ITP (Transfer Tax of 8%-10% of the deposited price, depending on the amount). The payment of this tax does not reduce the payment of the ITP corresponding to the total amount of the sale. If the document is registered, the expenses will be charged to the requesting party.
The expenses arising from the purchase are at the expense of the buyer. In other words
8% ITP (Transfer Tax) in the case of a sale between private individuals. Or 21% VAT (Value Added Tax) in the case of a purchase from a mercantile company.
Notary and Registry approximately 1-2% of the total price.
Bank charges for issuing cheques or transfers.
Municipal capital gain (to be paid within 30 days from the date of sale)
IRPF corresponding to the Patrimonial Increase for the sale, which must be included in the annual income tax return.
It is important to know the amount of these expenses before putting your home up for sale. Consult your tax advisor.