It is strongly advised when purchasing property in Mallorca, to use a qualified Mallorcan solicitor, just as people who purchase property in the U.K. would always use a British solicitor, same rules apply here.

Buying Procedure

1. First the property is selected and the terms agreed on.

2. Reservation deposit:
A reservation deposit of between 5000€ - 10.000€ is paid depending on the type of property (This amount can be raised depending of property and sellers request). The deposit secures the property, and takes it off the market for a period of 2-4 weeks. This is so your solicitor can do the necessary searches on the property, to make sure it is safe to go ahead and buy. This period also gives you time to get an approval on a mortgage, if one is required. The reservation deposit is held by Prime Properties Mallorca, and we guarantee a full refund, should the solicitor find a problem with the property, that you are not happy with or your mortgage is denied.

3. Option to buy contract:
Once your solicitor says its safe to go ahead, an option to buy contract is agreed on. The contract states the purchase price and a date for completion, which is settled by both parties. On the signing of the contract, 10% of the purchase price is handed over to vendor. (The reservation deposit becomes part of this 10%). If the buyer breaks the terms of the contract the vendor is entitled to keep the 10%. If the vendor breaks the terms of the contract the vendor must pay the buyer double the 10% back. This is a very fair way of ensuring all involved, that their time is not wasted. Only a very small percentage of sales do not complete once the option to buy contract is signed.

4. Costs and taxes:
The costs and taxes normally add up to app. 10% of the purchase price, and are divided as follows:
Notary fees: Approx. 1 % of the purchase price.
Solicitor's fees: Approx. 1% of the purchase price.
Property transfer tax: When purchasing a second hand property, a transfer tax of approx. 7% of the value stated on the Title Deeds. This tax is NOT the same as Value Added Tax (VAT). VAT is applied to new properties at a similar rate of 7%.
`Plus Valia´ tax: This is usually a small fee levied by the Town Hall. The fee increases a long with the value of the property.
Other costs: An amount of 0.5% of the Title Deed value is paid to register the property in the Town Hall. Stamp duty is levied at 1%. If a buyer applies for a mortgage then there will be around 3.5% administration and legal costs on the amount borrowed.

This all requires a:

Fiscal Identification number: When buying property in Spain you are required to have this number in order to pay your due taxes, this will be applied for by your solicitor and can take up to 4 weeks to recieve. Also, we would be happy to speed up this process by assisting you to the policestation in Palma de Mallorca, where the certificate can be obtain the same day.

Completion: The new title deeds will be signed in front of the Notary. The buyers who’s names will be on the new title deeds, must be there in person, unless a power of attorney is given to your solicitor/legal representative, who can sign on your behalf. Once the seller is paid, the new title deeds are signed and the new owner receives the keys, at this point the new owner has full title and possession to his/her new property! It is customary that the new owner’s solicitor changes all the services like water, electric and local rates into your name leaving you free to enjoy your new home!

This document is to be used as a rough guide and as general information only, therefore Prime Properties Mallorca cannot be held responsible for any misunderstandings of the conveyance procedure in Spain and the Balearic islands. Buy your property through Prime Properties Mallorca, and we will put you in contact with a fully qualified Mallorcan solicitor, who will guide you through every step of your purchase. By doing so you will avoid any pitfalls, and will be free to enjoy your investment for years to come!