Prepare your property purchase correctly
The coronavirus pandemic has increased interest in real estate in Mallorca. More and more owners are planning to rent. Investors are also sniffing out new opportunities. However, prospective buyers in particular should act with caution.
When buying a property, especially for vacation rental, it's like other things in life: Serenity and foresight protect against unnecessary, later expenses and unpleasant consequences. That's why you should have the property and contract checked by an independent third party you trust before you buy.
Watch the market, especially for the area where you plan to buy. The buying process takes some time, and real estate prices are constantly changing depending on supply and demand. Especially against the backdrop of rapidly changing pandemic conditions, the real estate market is subject to comparatively rapid changes.
Prerequisites
First and foremost are the necessary documents. To purchase a property, you need a so-called NIE number, which is applied for at the foreigners' register. This can take a few weeks. It is also important to register with the Spanish tax office with the NIE number and set up a Spanish bank account.
Planning your use
After all, it's about the property itself. Do you want to use it as your main residence or offer it as vacation accommodation? It is also worth thinking about the long-term use of the property at an early stage, for example about the possible resale or about the investment that is to be inherited. This means that the tax burden can be taken into account in good time. Property tax in particular plays an important role in the value of the property. In another article, we have already referred to the possible sales tax and land transfer tax that may be incurred depending on the type of property.
Think about hidden costs
Once you have found a property, the temptation to sign a preliminary contract is great. But this is exactly what you should have legally checked in order to obtain real security. The focus here must be on the right of withdrawal, down payments and refunds as well as any taxes incurred.
Also bear in mind that even the cheapest property always comes with additional costs. These are hidden fees and taxes that are incurred when you buy. There are also possible loan fees and certain conditions. Although interest rates are currently low, some banks in Spain link the granting of a mortgage to the conclusion of a life insurance policy.
Land register and property register
The lawyer should check whether the details in the land register and the property register match. In addition, there are possible building conditions imposed by the municipality that should be checked. If certain permits are missing, it is important to clarify how these can be granted. The structural inspection of the property also plays a major role. The entries in the land register and property register must correspond to reality.
Set on competent support
Specialist law firms will advise and support you when buying a property. They draw up and prepare the purchase contract, accompany you to the notary appointment, take care of registrations with authorities and offices and calculate any taxes due, to name just a few things.
