If the owner is not on the island or does not have the time or commitment for countless viewings, he will be pleased if a professional estate agent takes this burden off his shoulders and tirelessly explains the property.

Particularly during the subsequent purchase process, the seller recognizes the importance of coordinating all the relevant issues in view of their abundance, the discussions with the Spanish institutions and authorities involved, the preparation of the purchase contract and the notary appointment, etc.. The estate agent takes a lot of the work and correspondence off his hands, so that the seller only has to worry about signing the contract at the notary's office.

Depending on the budget, all regions of Mallorca are generally of interest to buyers. The southwest as well as the south and southeast (i.e. from Port d'Andratx to Santanyi) are particularly popular, as are Deià, Sòller, Valldemossa, Puigpunyent and Esporles in the west.

The center of the island with its picturesque villages such as Alaró, Santa María del Camí, Porreres, Sant Joan, Vilafranca del Bonany etc. is particularly popular with nature and mountain enthusiasts.

In Palma, property searches are mainly aimed at Portitxol, El Molinar and Santa Catalina.

In the north, demand has been increasing for years in Pollensa and Port de Pollensa.

On the east side, there are mainly villages such as Artà, Capdepera, Canyamel and Cala Ratjada, Cala Millor.

Mallorca, the largest of the Balearic Islands, has been a popular destination for real estate investors and vacationers for decades. Its picturesque beaches, pleasant climate and vibrant culture attract people from all over the world. But buying a property in another country can be complicated, especially when it comes to legal aspects. One instrument that comes up time and again in this context is the option contract. But what exactly is it and how does it work when buying a property in Mallorca?

What is an option contract?
An option contract is a legal instrument that gives one party (the optionee) the right, but not the obligation, to buy a specific property within a fixed period of time at a previously agreed price. In return, the seller (optionor) undertakes to sell the property at this price if the optionee decides to exercise the option.

Why use an option contract?
There are various reasons why buyers and sellers might opt for an option contract:

Security for the buyer: The buyer can secure the property for a certain period of time without having to pay the full purchase price immediately. This can be particularly useful if they still need to clarify financing issues or make other arrangements.

Compensation for the seller: As the seller cannot sell to other interested parties during the option term, he usually receives an option premium from the buyer. This premium can be either a fixed amount or a percentage of the agreed purchase price.

Flexibility: Both parties have more time to clarify all the necessary formalities without the pressure of an immediate sale.

Special features on Mallorca
In Mallorca there are some special features with regard to option contracts:

• Notarization: In Spain, and therefore also in Mallorca, option contracts should be notarized in order to take full legal effect.
• Tax aspects: The payment of the option premium may have tax implications. It is advisable to seek advice from a tax consultant before concluding an option contract.
• Legal advice: As this is a legally binding contract, both parties should ensure that they fully understand the terms of the contract. Legal advice from a lawyer who is familiar with real estate law in Mallorca is therefore essential.

Conclusion
An option contract can offer advantages for both buyers and sellers when buying a property in Mallorca. However, it is important to be aware of the legal and tax implications and to seek appropriate advice. With the right preparation and advice, an option contract can be a useful addition to the traditional property buying process.

It is often a fallacy to rely solely on average prices per square meter, as these do not always accurately reflect the actual characteristics and qualities of a luxury property. Especially in a tight market like Mallorca, such average values are not always meaningful.

A more effective method of determining the price is to use comparable properties. Factors such as location, size, condition and features of the property play a crucial role in determining a realistic price in line with the market. Determining a realistic market price is one of our most important tasks in the sales process.

If you own a property in Mallorca, you will have to reckon with various annual costs. Here is an overview:

Property tax (Impusto sobre Bienes Inmuebles, IBI): This tax is based on the cadastral value of the property and varies depending on the municipality.

Income tax:
... for residents: People who stay in Spain for more than 183 days are considered tax residents and must pay tax on all their worldwide income in Spain (Impuesto sobre la renta de personas físicas, IRPF).

... for non-residents: Even if you do not live in Spain or do not rent out your property, the Spanish tax office levies a tax on an assumed "profit" from the property.

Property tax: In the Balearic Islands, assets located in Spain are taxed. This includes savings, shares and real estate. There is a state allowance of 700,000 euros. Please note that the tax rates and regulations for residents and non-residents may vary.

Garbage fees: These are municipal charges for the disposal of household waste.

Community fees: If your property is part of a residential complex or community of owners, charges may apply for communal services such as pool maintenance, garden maintenance, general lighting, administration and general maintenance.

It should be noted that this list is not exhaustive and may vary depending on the individual situation and municipality. It is advisable to regularly inform yourself about the current tax rates and the corresponding legal regulations on Mallorca or to consult a tax advisor on the island.

Real estate transfer tax (Impuesto sobre transmisiones patriomoniales): This tax is primarily based on the sales price of the property. However, the tax office can check the value and adjust it if necessary. The scale of property transfer tax in the Balearic Islands is as follows:

For the first €400,000 of the purchase price: 8 % Land transfer tax
For the purchase price of € 400,001 to € 600,000: 9 % Real estate transfer tax
For the purchase price from € 600,001 to € 1,000,000: 10 % Real estate transfer tax
For the purchase price from € 1,000,001 to € 2,000,000: 12 % Real estate transfer tax
For the purchase price from € 2,000,001: 13 % Real estate transfer tax

Value added tax (IVA - Impuesto sobre el valor añadido): VAT is levied on new buildings and amounts to 10% for apartments and houses. The sales tax replaces the land transfer tax for all new buildings.

Stamp duty (AJD - Impuesto sobre Actos Jurídicos Documentados): In the Balearic Islands, this tax is currently 1% and is always borne by the buyer.

Notary fees: These amount to around 0.2 to 0.3% of the sales price.
Fees for entry in the land register: This usually costs 0.2% of the sales price.

Legal fees: If you consult a lawyer, you should expect to pay around 1% to 1.5% of the sale price.

It is important to take all these additional costs into account in order to know the total cost of buying your property in Mallorca.

The time taken to complete the property purchase process in Mallorca can vary greatly. If you already have all the necessary documents and an N.I.E. number (Número de Identificación de Extranjero), the process can theoretically be completed within a few weeks. However, this assumes that both buyer and seller are willing and able to move the process forward quickly.

If, on the other hand, you conclude an option contract that specifies a longer term, it can take several months from the first reservation to the final notary appointment.

It is important to emphasize that various factors can influence the duration during the purchase process. These include:

Availability of the necessary documents: Both parties must ensure that they provide all the necessary documents for the sale.

Financing: If the buyer requires financing or a mortgage, approval from the bank may take additional time.

Legal review: It is advisable to hire a lawyer to review all legal aspects of the property. This may take some time, especially if there are any ambiguities or problems.

Ownership structure and land register: If there are complications in the land register or regarding the ownership structure, this can also lead to delays.

It is always advisable to be thorough and ensure that all steps are carried out correctly, even if this means that the process takes a little longer. A hasty purchase can lead to trouble and unnecessary problems in the future.

Value added tax (Plusvalía): This tax is levied on the added value of the property during your ownership and is based on the cadastral value of the property. Although the seller is legally obliged to pay this tax, it can be agreed in the sales negotiations that the buyer will pay it. It is important to define this clearly before signing the contract.

Gains tax: A tax of 19% (for non-tax residents) is levied on a profit on sale. If the seller is not resident in Spain for tax purposes, the buyer retains 3% of the sale price as security by default. This amount must be transferred by the buyer to the tax office within one month.

When selling a property in Mallorca, you should therefore include both the capital gains tax and the potential gains tax in your calculation in order to be able to accurately determine the net proceeds from the sale. It is also advisable to specify the exact breakdown of these costs in the notary contract.

If you wish to purchase a property in Mallorca, the following documents and bureaucratic requirements are essential for the notary appointment:

Valid passport or identity card: You must be able to prove your identity to the notary and the bank.

Spanish tax number (Número de Identificación de Extranjero, NIE): This number is required for all legal transactions in Spain, including the purchase of real estate. If you do not already have a NIE, you must apply for one before buying.

Documents relating to the property:

Deed of sale (Escritura): This is the official document confirming the change of ownership.

Extract from the land register: This ensures that there are no encumbrances, mortgages or attachments on the property.

Proof of payment of real estate tax (IBI) and garbage fees (tasa de basura/incineración) for the last 4 years: This confirms that the annual property tax has been paid.

Energy certificate: A certificate that shows the energy consumption and energy efficiency of the property.

Proof of payment: Proof should be provided that all current utility bills (electricity, gas, water, etc.) have been paid.

For condominiums: A document confirming that all community fees have been paid. This document is usually issued by the president of the condominium or the administrator of the community of owners.

It is always advisable to consult with a local lawyer or notary before buying to ensure that all the necessary documents are in place and that the purchase process runs smoothly.

Yes, it is generally possible to buy a property without a certificate of habitability (Cédula de Habitabilidad). This certificate is not mandatory at the notary's office in order to purchase a property. The Cédula de Habitabilidad confirms that a property meets the minimum requirements for habitation and is required for many administrative processes in Spain, including Mallorca.
Nevertheless, it is highly recommended that you have this certificate before you buy a property.

Here are some reasons why:

Supply contracts: Without a valid certificate of habitability, you cannot conclude initial contracts for important utility services such as water, electricity and gas.

Safety and comfort: The Cédula de Habitabilidad ensures that the property meets the minimum standards for habitability. This can be important, especially if you want to use the property yourself or rent it out.

Resale: If you plan to sell the property in the future, the lack of this certificate may deter potential buyers as it would mean the same restrictions for them.

If you are considering buying a property without this certificate, you should carefully examine the reasons for this and seek advice from a specialist property lawyer. It could be that the property has certain defects or non-conformities that prevent the certificate of habitability from being granted.

Then you should note the following points:

Down payment: Spanish banks normally require a personal contribution of 20-40% of the purchase price of the property. This means that they usually finance a maximum of 60%, in exceptional cases up to 70% of the property value.

N.I.E. number (Número de Identificación de Extranjero): You need a Spanish tax number for foreigners in order to apply for a mortgage.

Proof of income: You must be able to prove your income. This can include payslips, tax returns or other official documents.

Credit check: The bank will check your creditworthiness. This usually includes a review of your current debts and financial obligations.

Interest: As already mentioned, most mortgages in Spain are linked to the Euribor, which means that the interest rate is variable. However, there are also fixed-rate offers that can be attractive in times of low interest rates.

Additional costs: Please note that additional costs may be incurred when taking out a mortgage, such as notary fees, valuation fees for the property and processing fees from the bank.

Running time: The typical term of a mortgage in Spain is between 15 and 30 years, with the maximum term normally not exceeding the borrower's 70th or 75th birthday.

Insurance: Many banks require you to take out life insurance and/or home insurance when you take out a mortgage with them.

Early repayment of the loan: Find out about possible fees or penalties for early repayment of the mortgage.

Consulting: It may be advisable to use the services of an independent financial adviser or mortgage broker to ensure you get the best deal and understand all aspects of the mortgage.

Finally, you should always compare offers from several banks before deciding on a mortgage. Each bank has its own conditions and it is important to find the offer that best suits your needs and financial situation.

Almost all banks in Mallorca make a distinction between Spaniards and foreigners. As a rule, locals get up to 80 % of the purchase price financed, for foreigners it is only 65-70 %.

The typical term for a rental contract in Spain is set at one year. At the end of this year, the contract is automatically renewed for a further year, up to a maximum of three years, unless one of the parties terminates the contract.

Some important points in Spanish tenancy law:

Notice periods: The tenant can terminate 30 days before the end of the term (12 months), but can also terminate earlier subject to the relevant conditions.

Security deposit: When renting an apartment, it is customary to pay a deposit. For long-term apartment rentals, this is usually one to two months' rent.

Tenants' rights: If the tenancy agreement is automatically extended and the landlord wishes to sell the property, the tenant has a right of first refusal in many cases.

Termination by the landlord: After the end of the first year, the landlord can only terminate the tenancy agreement for certain reasons, e.g. if he wishes to use the property for himself or his family. However, he must give at least two months' notice.

It is essential to have a clear and well-structured tenancy agreement that clearly sets out the rights and obligations of both parties. If you have any uncertainties or questions, you should consult a real estate expert or lawyer who is familiar with Spanish tenancy law to ensure that all aspects of the tenancy are formulated correctly and fairly.

We have very good contacts with trustworthy and highly professional property managers who will look after your property while you are away.

Such a service provider can take on a variety of tasks, including:

Regular inspections: To ensure that everything is in order, especially after storms or during periods of prolonged absence.

Maintenance and repairs: The property manager can commission tradesmen and ensure that all repairs are carried out professionally.

Garden and pool maintenance: If your property has a garden or pool, the manager can ensure that these are kept in good condition.

Payment of invoices: In your absence, your property manager can pay any bills that arise, e.g. for electricity, water or community fees.

Rental management: If you want to rent out your property, the manager can also take care of the rental, from looking after guests to cleaning after their stay.

Security: The property manager can ensure that alarm systems are working, that any surveillance cameras are in operation and generally ensure the security of your property.

Post and parcels: In your absence, the property manager can receive your mail and ensure that important documents or parcels are forwarded to you.

It is important that you make clear, individual agreements with the property manager and set out all expectations and obligations in writing. This ensures that both parties know what is expected of them and minimizes potential misunderstandings.

Yes, in Spain and especially in Mallorca, building permits are essential for property renovation work. The distinction between "Obra menor" and "Obra mayor" is crucial here:

Obra menor (small building permit):
For work that does not make any structural changes to the property. Examples include painting walls, replacing doors or windows without changing the opening size and other cosmetic work.

The approval procedures are generally faster and less complex, but it is still important to obtain information from the responsible municipality in advance.


Obra mayor (major building permit):
For major renovations that change the structure of the property, such as adding or removing walls, extending the building, adding a pool or making changes to the facade.

This procedure is more complicated and often requires the submission of building plans drawn up by an architect. It can also take longer for approval to be granted.


Regardless of the extent of the renovation, it is always advisable to check with the relevant local authority or building department before starting work. This ensures that you have all the necessary permits and avoids potential legal problems or penalties in the future.

In addition, in some areas of Mallorca, especially in historic centers or near protected natural landscapes, there are special restrictions and regulations that should be strictly observed.

The number of days you spend in Spain is one of the key factors in determining your tax residence. The 183-day rule is decisive here. If you spend more than 183 days in Spain in a calendar year, you are considered a resident for tax purposes and must pay tax on your worldwide income in Spain.

However, there are other criteria that can determine your residence in Spain:

Center of life's interests: If your main business activities or economic interests are in Spain, you can be considered a tax resident even if you have spent less than 183 days in Spain.

Marital status: If your spouse and/or minor children who are dependent on you have their permanent residence in Spain, you may also be considered a tax resident even if you have spent less than 183 days in the country.

It is important to note that the determination of tax residency depends on various factors and not just on mere presence. It is advisable to contact a tax advisor or lawyer in Spain to clarify your individual situation if you are unsure.

If you wish to be recognized as a resident in Spain, you must also register with the National Police and apply for the corresponding residence card (Tarjeta de Residencia). This is a separate process, independent of the tax assessment in Spain.

Yes, as a non-resident who owns a property in Spain, you are obliged to submit a tax return, even if you do not rent out the property and do not receive any income from it. This is known as "imputed income tax" (Impuesto sobre la Renta de No Residentes).

The Spanish tax office assumes that you have a theoretical income advantage from owning the property, even if you do not receive any rental income. This means that you have to pay tax on notional rental income. The calculation is based on a small percentage of the cadastral value of the property.

If you actually receive rental income from your property, you must declare this income in your tax return as a non-resident and pay the corresponding taxes.

It is advisable to use the services of a Spanish tax advisor to ensure that all tax obligations are met correctly and that you do not risk any penalties.

If you're thinking about buying a finca in Mallorca, you've probably asked yourself: "How much will it cost?" The answer to this question is not so simple, as the price of a finca depends on various factors. Here are some of the most important criteria that influence the price:

1. legality
It is important to check that all legal aspects of the finca are in order. This includes checking building permits and other relevant documents.

2. existing documents
The completeness and accuracy of the available documents play a decisive role. An example of this is the existence of a valid certificate of habitability.

3rd position
As with any property, location is key. A finca in a sought-after area will probably be more expensive than one in a less popular region.

4. dimensions
The size of the finca, both the land and the building, will significantly affect the price.

5. condition
A newly renovated or well-maintained finca will have a higher price than one that needs repairs or renovations.

6. silence factor
Proximity to flight paths can influence the price, as noise is a decisive factor for many buyers.

7. accessories
Additional amenities such as a pool, garage, guest house, shed, heating and others may increase the price.

8. furnishing
Whether the finca is sold furnished or not can influence the price.

9. power supply
The type of power supply, be it via Endesa electricity or a solar system, can vary the price.

10. water supply
The presence of a private water well can increase the value of the finca.

11. safety
A fenced finca offers additional security and can therefore be more expensive.

12. purchase decision
The speed of the purchase decision can influence the purchase price. For example, if you can buy immediately without waiting for a financing commitment from the bank, you may be able to negotiate a better price.

Conclusion
Buying a finca in Mallorca is a significant investment and there are many factors to consider. It is always advisable to carry out thorough research and seek expert advice before making a purchase decision.

Mallorca, the largest island in the Balearic Islands, is not only a popular vacation destination, but is also attracting more and more people who want to live or invest here permanently. It is important to familiarize yourself with the local taxes and duties. One of the most important taxes for property owners in Mallorca is the property tax (known in Spain as the "Impuesto sobre Bienes Inmuebles" or "IBI" for short).

What is property tax?
Property tax is an annual tax levied on the ownership of real estate. It is set by the municipalities in Mallorca and varies depending on the type and size of the property. This means that the amount of property tax can vary from municipality to municipality and can also vary within a municipality depending on the type of property (e.g. apartment, house, plot).

How is property tax calculated?
Property tax is calculated on the basis of the cadastral value of the property. This value is usually lower than the actual market value of the property. The respective municipality sets a tax rate that is applied to this cadastral value to determine the property tax payable.
It is important to note that the cadastral value and the tax rate can be reviewed and adjusted regularly. It is therefore advisable to check regularly for possible changes.

What is the waste fee?
Each residential property is charged a waste disposal fee. Each municipality also defines for itself when and how this fee is to be paid (usually in the fall and annually), and also whether this waste fee includes both collection and incineration or whether both items are billed separately.

When and how are property tax and garbage fees to be paid?
As a rule, property tax and the waste disposal fee are payable once a year. The exact payment date can vary from municipality to municipality, but is usually in the fall. For several years now, the municipal administration has generally no longer sent out payment notices to property owners, so that in the event of a change of ownership, the buyer of a property must make an appearance at the ATIB (Balearic Tax Office) together with all the relevant documents so that the payment of property tax and garbage fees can proceed smoothly from the following year, usually by direct debit. The buyer and seller must pay both items pro rata in the year of sale, whereby they are first charged to the seller and the seller then settles with the buyer by deducting this amount from the purchase price of the property, for example.

Conclusion
If you own a property on Mallorca or are considering buying one, you should definitely familiarize yourself with property tax and garbage fees. These are the most important annual charges for property owners on the island. By informing yourself and planning well in advance, you can ensure that you are not surprised by unexpected tax demands. It is also advisable to seek advice from a local tax advisor to ensure that you meet all your tax obligations.