Current program of the Balearic Government
A mortgage guarantee from the Balearic government now makes it easier for people on Mallorca and the neighboring islands to buy a property with a maximum value of up to 270,000 euros. The state social housing institute IBAVI assumes the guarantee for a bank-financed property up to a maximum of 20 percent of the purchase price. However, if you actually find a reasonably priced property within this range, there are a few conditions that must be met. Among other things, the highest annual income must be around 57,000 euros (or approx. 64,000 euros for couples/families).
You must have Spanish citizenship or citizenship of a member state of the European Union, as well as legal residence in Mallorca or the neighboring islands and have lived in the Balearic Islands for at least five consecutive years. You must be the buyer of the property and the borrower. At the same time, you must not be the owner or usufructuary of another home on Spanish territory.
Exceptions for heirs and disabled persons
Exceptions to this requirement are made if you have inherited housing, you are at least 33% disabled (unless the housing meets your needs), or if you are a victim of separation, divorce, catastrophic situations, gender-based violence or terrorism.
You must also have an annual income that is calculated according to the income tax base and is below certain limits: one person up to 57,117.67 euros; two or more persons up to 64,257.38 euros.
For the properties concerned on the Balearic Islands, which must be intended for habitual and permanent residence, the purchase price (including parking space, storage room, etc.) may not exceed a total of 270,151.20 euros (excluding ancillary costs and taxes). A financial institution must finance at least 80 percent of the total value of the property.
The IBAVI housing institute offers a guarantee on this loan and charges a one-off processing fee of 0.50% of the guaranteed amount. If the beneficiary stops making installment payments on the loan, IBAVI will enforce the guarantee. The beneficiary must sign a letter of guarantee, which allows IBAVI to sue for unpaid installments in court if necessary.
Required documents
• Application for guarantee, responsible declaration and data protection declaration (available from the participating banks).
• National passport or identity card of the applicant.
• Income tax declaration for natural persons or income certificate issued by the State Tax Administration for the last completed tax year.
• A simple note from the Central Property Registry confirming that the applicant does not own any property in Spanish territory or, alternatively, recognition of an exemption (•). Alternatively, recognition of an exception (https://www.registradores.org).
• Pre-contractual documents (deposit, reservation, purchase option).
• Certificate of registration in the population register of the Balearic Islands for a minimum period of 5 years (Empadronamiento). The certificate is requested at the town halls of the municipalities where the applicant has resided.
• proof üof the purchase contract including the stated purchase price.
Bank is the first point of contact
Contact one of the financial institutions on Mallorca and the neighboring islands that are members of the IBAVI mortgage guarantee program. As of February 22, 2023, there are only three: CaixaBank, Cajamar and Caixa Colonya.
Submit your documentation for review and evaluation. The bank must send a favorable opinion directly to IBAVI in order to obtain the mortgage guarantee. The IBAVI must notify the applicant of its decision via online notification (Carpeta Ciudadana). As soon as a positive decision is received, the public deed is signed before a notary.
Applications can be submitted until 31 December 2024. December 2024 as long as the available budget of 15 million euros has not been exhausted.
Michael U. Maier
