Buying real estate on Mallorca - investment for the future?

Mallorca, the main island of the Balearic Islands and the favourite holiday destination of many has a modern infrastructure and is a hub for national and international visitors and investors. The airport of Son Sant Joan alone is one of the 20 busiest airports in Europe. From Mallorca you can be almost anywhere in Europe within 2-3 hours. The warm climate, the diverse landscape and vegetation, the culture, and more than 500km of coastline, the almost unlimited possibilities in the field of leisure and sports and the internationality of the island in the Mediterranean Sea offer many advantages. A house, a plot of land or an apartment on Mallorca is not only a status symbol or a dream come true, rather the purchase of a real estate object on Mallorca is considered a solid and promising investment.

If you want to know what to consider when buying a property on Mallorca read our FAQs.

We offer individual multilingual support in English, German, Spanish and French and provide objective and detailed advice on regions and prices. After an expert inspection of the plots, you will have the extensive support of our team of architects, construction technicians and engineers. In the next step, we also take care of the mediation and coordination of competent experts such as lawyers, banks, tax consultants, experts and other service providers. In this way, we take all the bureaucratic hurdles off your shoulders: from checking the official registrations, compiling all the necessary documents, applying for tax numbers to organising the notary appointment.

In order to make the property search as effective as possible, we initially conduct a needs analysis with you. Here we get to know your search criteria and financial framework, and on this basis we can put together a selection of plots for you that are perfectly suited to your wishes and needs. For this we can rely on our large portfolio of over 700 plots of land, as well as island-wide contacts and extensive knowledge of the property and land market. The next step is the inspection of the plots with you, for which we may already consult an architect if necessary. In this way, we ensure that we can check the allowable extend of development of the plot and corresponding building regulations before purchasing it.

Making a cost breakdown is easy. When buying a plot of land, the following fees and taxes are due:

  • Notary fees and the cost of re-registration.
  • ITP (Impuesto sobre Transmisiones Patrimoniales Onerosas) – purchase tax when buying a property in resale
  • AJD (Actos Jurídicos Documentados) – 1.5% stamp duty is sometimes charged

How to correctly calculate the ITP (land transfer tax):

Selling price up to 400.000€ – the ITP is 8%

Selling price from 400.001€ to 600.000 € – the ITP is 9%

Selling price from 600.001€ to 1.000.000 € – the ITP is 10%

Selling price from 1.000.001 € – the ITP is 11%

It is however a special case if the seller of the plot is a company (SL), then the real estate transfer tax (ITP) is omitted, but 21 % IVA (tax) is levied.

Plots of land can be purchased on Mallorca from developers, investment companies and brokers, and of course from the owners. But be careful: not every plot on the Balearic Island is buildable ground. The difference between building on a plot in an urban or town area (suelo urbano) and in a rural area (suelo rustíco) alone is huge. Legal regulations on building are not easy to understand, so a professional firm should be consulted before buying. The permissible development depends not only on the location, but also on the size of a plot of land, setback regulations, development plans and many other specifications.

First of all, you need a Spanish tax number for foreigners, the so-called NIE (Numéro de identidad de extranjero). You can apply for this at any Spanish consulate in Europe, which can take up to 3 weeks. However, you can also apply for it on Mallorca at the Immigration Office, which is much faster. Opening a Spanish bank account is the next important step, as you will need this mainly for running costs of the property on Mallorca, but also for the purchase of the property itself. In Spain it is customary to pay the purchase price by means of a bank-certified cheque from a Spanish bank at the notary appointment.

Before buying, ask to see a cadastre excerpt and the land register of the selected property and check whether there are any pre-emption rights, mortgages, or liens in the land register extract. You should also ask to see the last bills (up to 6 months back) for electricity, municipal taxes and garbage fees (for the past 3 years) as well as a tax clearance certificate from the seller.

If you have purchased a renovation property on Mallorca, then you certainly want to get it into a habitable and livable condition as soon as possible. Here you should think about hiring a local construction company that knows the legal regulations and especially also trades of the island. You will need an architect and a technical architect, just as for a new construction. It is important to note that it is not uncommon for parts of a building to not be legal under today’s regulations. The examination of all current building law regulations is an important part of the analysis by the building partner(s).

If you have found a suitable plot of land for purchase, which corresponds to your ideas and wishes, then you should contact an architect before the purchase process. He should clarify all important questions with you in advance. This includes, above all, the allowable extend of development of the plot, the general conditions for construction, legal requirements, utility connections, etc. The better an architecture company is networked, the faster your construction project on Mallorca will lead to the desired result. When choosing an architect, it is important for you that the architect understands you, speaks your language and that the “chemistry” between you is right. The chosen architect will accompany you during this process for quite a while because the construction of a house on Mallorca can take between 1.5 and 2 years.

Following the choice of the architect, you will have to select a construction company and the technical architect. It usually makes the most sense to leave this to the architect of your choice. A building project is always completed with the so-called “Final de Obra”, the building completion certificate, which is first issued by the architect and then confirmed by the municipality in charge.

Our subsidiary brand Casa Meva offers you a wide range of pre-designed house types. This results in considerable cost and time advantages. Since the architectural and planning services have already been completed, we can start the construction phase with Casa Meva within a very short time. The cost savings from the planning services already provided are passed on directly to you. Casa Meva houses are built according to German quality guidelines and are handed over to you ready for you to move in and at a fixed price.

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