Buying an apartment in Mallorca can be attractive for many reasons. Whether you intend to use the property for your own permanent or temporary use, or whether you are thinking of renting it out as a holiday home. With your own apartment, you are independent, have more design freedom than with a rental property and possess a long-term and secure financial investment. As an EU citizen, you also enjoy the same rights as Spanish citizens when buying property in Spain.
But when buying an apartment, there are also some aspects to consider, both with regard to a new apartment and when buying a second-hand property. The purchase process involves additional one-off and regular costs as well as obligations and risks that need to be clarified in detail so that the fulfilment of the dream of owning a home does not become a nightmare. Here are some points you should be aware of before you buy.
What is generally to consider when buying an apartment?
One reason for buying an apartment may be expected lower costs than in the case of a rented apartment. Here, however, it is important to find out in advance exactly e.g. about Spanish tax law and the expected costs as well as the house money. If you are buying from a private seller, also check the seller's right of disposal and make sure that there are no tax liabilities.
Insist equally on an individual contract instead of a form contract and invest in a notary to draw up a notarial sales contract (escritura pública de compraventa) in which all agreements are recorded in detail. Clarify your obligations as the owner as well as any special rights of use, e.g. with regard to the cellar, storage rooms, garden and above all the roof terrace, because the latter is often used as a sales argument, but is "only" a communal terrace. If you have not yet applied for a Spanish tax number (número de identificación fiscal, NIF for short), do so in good time, as Spanish tax law requires you to submit your tax returns independently and on time. In addition, the NIF is required for the correct land register entry.
Before purchase: A look at the land register and cadastre
When buying both a new and a second-hand condominium, it is essential to check the registration in the land register (registro de la propiedad) and its reference at the land registry office (referencia catastral) and to compare it with the actual circumstances. Here it is important to know that the land registry and the land registry are separate institutions in Spain. Accordingly, the existing entries can also differ from one another and have different current values, so you should always check both.
The land register entry is not only helpful for the acquisition of entire properties, but also for the purchase of apartments. It must be checked whether the living space is correctly indicated and whether debts or charges may have been entered for the property in question. These can be an indication of matters that must be clarified before the contract is signed, so that you as the purchaser are not later held liable for entries for which the previous owner is responsible.
The entry of the title of ownership in the land register also provides additional legal certainty and is the official proof that you are the owner of the apartment when reselling the apartment. The information in the cadastre, for example, serves as the basis for the annual property and income tax to be paid, so it is definitely appropriate to be in the picture here. If corrections and adjustments are to be made to the entries, it is also advisable to arrange for this in good time and, if possible, to place the responsibility with the seller.
Purchase of a new apartment
The quality of the building fabric and modern equipment can be decisive advantages of a new apartment. If for these reasons you want to buy such a residential property, you should in any case inform yourself in advance about a valid building acceptance - granted by the responsible municipality - as well as a habitability certificate. If a community of owners is involved, you should inform yourself about possible obligations as an owner of the community and make sure if and what costs you will incur from this direction.
As a rule, you will purchase a new apartment from a property developer or a commercial company that acts as a legal entity. In this context, Spanish VAT (impuesto sobre el valor añadido, IVA for short) is due. The rate for condominiums has been 10% since the tax rate was adjusted in 2012. Attention: Residential properties that have not yet been completed - just like building plots, by the way - are even taxed with 21% IVA. This tax is levied centrally and must be paid to the central tax office accordingly.