Mallorca property sales: Image you have successfully listed your property for sale with Only Mallorca and shortly after our sales agents present you a suitable client who is interested in buying your Mallorca property. The client made a good offer and you are likely to find a price agreement with him. What exactly are the next steps and what else do you need to know to successfully sell you Mallorca Villa, Plot or Apartment in front of a Spanish Notary.

NEGOTIATIONS

As soon as one of our clients makes a price offer on your Mallorca property the sales agent in charge is going to contact you. It is our strict company policy to forwards all offers to the owners even though we might already turned them down on your behalf. Sometimes price offers don’t reflect the price valuation of the agent or the personal aspirations of owner. Successful negotiations define everything from agreeing the final price to setting a timeframe for completion and other agreements.

LEGAL ADVICE

he Only Mallorca Administration department is capable of setting up option -and property purchase contracts and can prepare all the necessary paperwork deliberately which is mandatory for the notary signing. The signing of the new title deeds usually takes place 4-8 weeks after the price has been agreed. Nonetheless Only Mallorca is not a law firm and cannot take over any responsibilities and legal reliabilities nor warranties. For this reason we always recommend you to take a lawyer, especially when it is the first time that you purchase property on Mallorca. Only Mallorca is happy to provide you with a list of different lawyers that have a proven track record on the island and you can choose the person you feel most comfortable with. Fees can be discussed directly with the different law firms and usually range around 1% of the transaction sum. Your lawyer will then check if the property is free from any liabilities, debt or outstanding mortgages or loans and will confirm the legal owner of the estate and check the title deeds. On Mallorca lawyers will also take care of other normal legal checkups -does the property have all the necessary licenses, is it correctly inscribed into the land registry, are there any urbanistic infringements? Your lawyer will also inform you correctly about the purchase taxes and other fees and taxes while, during and after the purchase. Last but not least your lawyer will be reliable that the transaction goes through in a smooth manner and that the property will be purchased in an optimal way, legally and fiscally.

REVENUE FROM PROPERTY SALES

When you sell your property on Mallorca you are obliged to pay certain taxes to the Spanish tax authorities. Please note that taxation may vary due to your personal circumstances. Please note that taxation may vary due to your personal circumstances. Only Mallorca is not a tax advisor nor a law firm and we do not accept any liability or legal responsibility. We are not responsable for any errors, changes or omissions. For further information we are happy to recommend you a tax advisor or a lawyer.

Property Tax 

This municipality tax has to be paid to the town hall yearly and reaches from 0,4% to 1,1% of the cataster value which is usually half the real value of a property

Wealth Tax

This tax is applied to private persons, residents and no-residents with goods and rights located in Spain with a value which is superior to 700.000,- EUR. This exemption of 700.000,- EUR is applied for each physical person. Bank Mortgages can also be deducted. The tax burden reaches from 0,2% to 2,5% depending on the personal situation of the contributor.

Sales Tax

This tax is arising from the direct sale of a property of a non-resident in Spain is 21% on the benefit. This benefit has to be declared in the anual tax statement (maximum time to present the declaration is 4 months counting from the date of the notary appointment) declaring all benefits or loss deprived from the Mallorca property sale. The notary will apply a 3% retention of agreed sales price. The 3% retention will be deduced and compensated with the possibility of having to pay or to receive a tax return.

Corporate Income Tax

If a property is held and sold by a Spanish company the sale of company assets generally pays 30% on the obtained benefit.

Plusvalia Municipal Tax

This tax is based on a concept of incrementation of value of plots and land. The tax is calculated on the cataster value. The tax increases by the years the property is held by its owner.

EXCHANGE OF CONTRACTS

In Spain there are two different types of contracts that should be signed when you want to reserve you Mallorca Dream Home.

The Option Contract

The option contract is a binding document where the Seller (gives the option) grants the buyer (takes the option) the right to buy the Mallorca property within a certain timeframe for a certain price. The option usually costs the option taker 10% of the purchase price. When the property is sold in front of the Notary the option fee will be deducted from the sales price. If the seller does not fulfil the contract and does not want to sell anymore or sells to somebody else, he must return to the double amount of the option fee to the buyer as a fine.

The Private Purchase Contract

The private purchase contract is a binding contract that states that the seller is selling his Mallorca property to the buyer for a certain price until a certain date. 10% are paid as deposit. This amount will be deducted from the final sales price once the property is sold in front of the notary. If the buyer does not proceed he looses his deposit. In case of a signed purchase contract, the seller cannot step out of the contract and the buyer can legally enforce his rights to buy the property. This contract is the safest and legally most valuable contract.

THE NOTARIAL ACT

At the notary date Only Mallorca will accompany you to the signing and will be able to answer all you immediate questions right on the spot. The purchase deed will be read to you by the Notary and will be translated into German or English simultaneously.  The agreed purchase price minus the deposit will be paid via Bank Checks at the notary date. These checks will be copied and will be included into the title deed. You will receive a copy of the title deed with your name as the new owner; a further copy goes to the registry in order to inscribe you as the new legal owner. In Spain you are the official owner of the property as soon as the title deed has been signed right after the notary date. Mallorca property sales and purchase could not be easier.