Buy a Finca in Mallorca
Buying a finca in Mallorca
is connected with many considerations and joy.
Buying a finca in Mallorca is “in”.no wonder. Mallorca is one of the most popular holiday destinations in Europe. So it is not surprising that the number of holidaymakers every year is in the millions. But not everyone who has fallen in love with this island likes to stay in hotels, so holiday homes, fincas or holiday flats are a good alternative to feel more at home on holiday.
If you want to intensify this feeling even more, you should take the next step and consider buying a finca on Mallorca. This not only ensures that accommodation is secured even on a spontaneous holiday, but also offers many other advantages that may not even be thought of at first.
For whom is the purchase of a finca in Mallorca worthwhile?
The answer here is quite clearly for everyone. Because even if the trip to Mallorca is only made once a year, this does not mean that the finca must otherwise remain unused. On the one hand, the finca can also become holiday accommodation for friends and relatives, but on the other hand, it is also a good idea to rent out the finca during the times when it is not being used.
This not only helps to finance the finca, but can also be a good source of extra income. To avoid having to look after the finca after every stay, it is worth hiring a caretaker who can also do small jobs on the finca and maintain the property. If the finca is well occupied when it comes to renting out, the costs for the manager will quickly pay for themselves, so that they will be of no consequence. But even if the finca is not to be rented out, it is worth knowing someone on site who looks after things now and then, airs and takes care of the property a little, so that these are not the first tasks that arise when the holiday in Mallorca begins.
Especially in neighbourhoods where there are many holiday homes, there are also agencies that arrange caretakers. If you want to save this money and are just looking for someone to look after things from time to time, you can always ask a neighbour, as many locals are very helpful and are happy to look after things for their neighbours from time to time.
What should be considered before buying?
Of course, buying a property is a big step for most people, so nothing should be rushed. That’s why it’s worth taking a little time beforehand to write down which points your own finca in Mallorca should fulfil. First of all, you should consider the size and how many bedrooms are required.
You should also consider whether the finca is to be rented out or not. Even if your own family can manage with 2 bedrooms, it makes sense to choose a finca that has at least 3 bedrooms, so that more potential tenants are attracted. The next thing to consider is what standards the finca should have. For example, is a pool desired or is a beautiful view more important?
Should the finca already be ready for occupancy or are you not afraid to do some work yourself? These are all important points. Finally, you should also consider whether you really want a finca, because you can also buy a holiday flat in Mallorca. This is a good idea, for example, if you are looking for a holiday home in the city centre, as you may not want to rent a car on the island. Likewise, the holiday flats that can be found on Mallorca are ideal for couples who want to spend the winter on the island and you can make connections with other holidaymakers there straight away.
The right location is often decisive
If you want to buy a finca in Mallorca, you should think carefully about the location. Because the island is large and has many beautiful places to offer. Holidaymakers who regularly visit Mallorca have quickly found their favourite holiday destination, but when buying a finca or holiday flat, you should always consider whether other places on Mallorca might also come into question.
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Of course, it also depends on supply and demand. So if you want to buy a finca in a certain area, you first have to check whether there are fincas for sale there, and finally also whether there is one among these fincas that comes close to your own requirements. Therefore, it always makes sense to consider whether a longer distance to the favourite beach or another place is possible, if the new holiday home fulfils all wishes.
If you like peace and quiet, you can of course look for a finca that is a little further away, but you should always check things like water, electricity and internet connections so that additional costs do not arise after the purchase. In any case, it makes sense to think carefully about the location of your future holiday home and to look at different fincas until you have found exactly the one where you don’t have to make any compromises.
What does it cost to buy a finca in Mallorca?
Of course, this question depends on the location, size and condition of the finca. Although bargains can be found from time to time, they often require some renovation work before the finca meets your expectations. If you are looking for a finca in which you only have to put furniture before your first holiday, you should therefore expect costs in the middle 6 figures.
There are hardly any upper limits on Mallorca, and if you want a real luxury home, you have to reckon with prices in the seven-figure range. It is pleasing that there are also many very beautiful building plots in Mallorca. So if you have very specific wishes and requirements for your new finca, you can first purchase a plot of the appropriate size and then build your new finca there yourself. For those who do not have the time or simply do not want to build, it is worth considering a holiday home in Mallorca.
When buying real estate in Mallorca, it does not always have to be a finca, as holiday flats are also very beautiful and are often offered at much lower prices than fincas. Therefore, it should always be well considered, so that in the end a property is purchased that not only corresponds to one’s own ideas, but also does not exceed the set budget too much.
How can a finca on Mallorca be financed?
Not everyone, of course, has all the capital to pay for the finca without financing. This is usually not necessary, because just as with the purchase of real estate in Germany, financing through a loan is also possible in Spain.
Collateral is required for this, a fixed employment contract or, in the case of self-employed persons, proof of regular income from a tax advisor are a must. If the finca is to be paid for entirely through a loan, this is associated with many risks, so it is always recommended that at least 50% of the purchase price be brought along as equity.
Because even when buying Mallorca real estate, banks are rather reluctant to provide 100% financing and will require a lot of collateral, as well as possibly a guarantor, so that the loan is approved. Therefore, the dream of owning your own finca should rather be dreamed a little longer, if no capital is available, so that the financing can be managed later without guarantors and large securities.
What other requirements are needed for the purchase of a finca on Mallorca?
It is very important that everyone who wants to buy a property in Spain also needs a Spanish tax number, because without this the purchase contract cannot be certified by the notary. If you are travelling to Mallorca with the intention of buying a property, you can simply go to the nearest Spanish embassy, present your request and get the Número de Identificación de Extranjero for 15 to 20 euros.
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It is very important that everyone who wants to buy a property in Spain also needs a Spanish tax number, because without this the purchase contract cannot be certified by the notary. If you are already travelling to Mallorca with the intention of completing the purchase, you can simply go to the nearest Spanish embassy, present your request there
You will receive the Número de Identificación de Extranjero there for a price of 15 to 20 euros.
However, if you have spontaneously fallen in love with a property on Mallorca and want to complete the purchase directly, the Spanish tax number can also be issued directly on Mallorca by the local authorities. Furthermore, an account should be set up at a Spanish bank to facilitate the payment of the finca, because in Spain real estate is still paid for by cheque and this should come from a Spanish bank.
It is therefore worthwhile to compare the various Spanish banks in advance and then to open an account directly on arrival in Mallorca so that the cheque book is available when the purchase is to be made at the notary.
Is it worth having a lawyer when buying a house in Mallorca?
Here the answer is quite clearly: Yes! Because especially if you only speak a little Spanish, it can be very difficult to understand everything that is written in the purchase contract. That is why you should always have a lawyer present who can advise you and warn you of possible pitfalls. Likewise, special features in the purchase contract can be filtered out quickly.
Whether a neighbour has a right of way on the property, is allowed to use the water source, or whether there is a lease or even a right to live in the finca is all listed in the contract, so it is very important to have everything checked by a lawyer or notary before signing. Likewise, a lawyer can quickly clarify what type of development is permitted on a property or whether all documents for the finca have been properly submitted to the authorities.
Finally, the lawyer should also check whether there are tax debts or a land charge on the finca that will be transferred to the new owner. This can happen, so it is always worth checking this point so that later trouble can be avoided. Of course, there are always costs that you would prefer to avoid, but if you have not bought property in Spain or in general before, you should always use the help of a lawyer, so that after the purchase there are no surprises that you would never have expected.
A good estate agent helps to avoid mistakes when buying.
Besides the estate agent, there is another person who is very important when it comes to buying a property on Mallorca and that is the estate agent. Because if you start looking for a finca in Mallorca without the help of an estate agent, you can encounter many problems that you might not even suspect at first. Likewise, estate agents have many contacts and can thus also show properties in their portfolio that cannot be found anywhere else.
Another reason why it is so important to have an estate agent is that a good estate agent does not include every property in his portfolio. This is because many fincas on Mallorca are already getting on in years. In most cases this is not a bad thing, but with some fincas the building substance is so dilapidated that demolition is the only option.
If you are buying a property for the first time and do not have a trained eye for details, you will not necessarily recognise this. A real estate agent, on the other hand, knows exactly what needs to be taken care of, so that the fincas and holiday homes offered in the portfolio are in a condition that allows the buyer to use his holiday home for a long time.
However, a real estate agent also takes on many other tasks, such as searching for suitable properties in the preferred location, can provide assistance in the case of ambiguities and is often also a mediator between the potential buyer and seller when it comes to price negotiations.
But even if you have not yet decided 100% whether you really want to buy a finca in Mallorca, it is worth contacting a real estate agent, because a good real estate agent is happy to help anyone interested with words and deeds, can eliminate ambiguities, take away uncertainties and thus pave the way to the purchase of your own finca in Mallorca.
What should be considered during the inspection?
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Once you have selected several fincas that you would like to view, the next step is to make an appointment with the estate agent to view the property. In order to be well prepared, it is always worth making a checklist beforehand, so that you really check all the important points, ask the right questions and also look for things that are quickly forgotten when a fantastic view is already convincing on arrival.
The first item on the list should be to be there about an hour before the appointment. This gives you enough time to explore the neighbourhood, to get an overview and to see if you like the surroundings of the finca. At the actual appointment, you should check the structural condition of the finca. It is especially important to pay attention to the following things:
- Year of construction
- Last renovation/modernisation
- Condition of electricity
- and water pipes
- Check walls for any water damage
- how is heating
- is there air conditioning, if any
- how is the connection to shops/doctors etc.
Once these points have been checked and are to one’s satisfaction, it should also be checked whether all windows are tight or may need to be replaced. Finally, a look should also be taken at the surrounding properties. For as has already been mentioned, building continues on Mallorca, so that it cannot always be assured that a view that is pleasing will also remain so in the long term.
If a neighbouring plot of land, which is still undeveloped, is for sale, it is important to check whether construction will take place there soon. It may even be worth buying both plots of land to ensure that a beautiful view is maintained in the long term. In the end, you should always take a night
Finally, you should always take a night to let all the impressions sink in, so that you can decide the next day, or when all the visits have been made, which finca has won the race.
Buying a modern villa in Mallorca can have many advantages.
Especially with fincas that are located a little outside, it may be that they have already reached a certain age and therefore need some renovation or refurbishment work before you can move in. To avoid this from the outset, there are many new villas on Mallorca that are still waiting for a new owner.
These offer the advantage that no work needs to be done and often you are even lucky to find villas that are being sold fully furnished. This increases the price a little, but has the advantage that the new holiday home can be moved into immediately and you don’t have to deal with furnishing the villa first.
Likewise, with these new buildings, you don’t have to worry about things like electricity, water or internet connection, and heating and air conditioning are also standard in modern villas on Mallorca. So if you also like to travel to Mallorca in winter or would like to rent out the villa in winter, you should especially look at the new villas on the island to find a suitable property on Mallorca.
Finca or holiday flat – What is best?
There is no one concrete answer here, because everyone is different and has different demands on their holiday home. Therefore, it is worthwhile for many people to simply visit both types of property. Of course, if you already know that you have a large family with more than 8 people who would like to spend their holidays in Mallorca at the same time, then you should tend towards a finca or villa, but for everyone else it is also worth giving the holiday flat in Mallorca a chance.
Because here you can choose between a condominium in a normal residential building and special holiday flats in buildings in which all serve as such. There are small flats with only one bedroom as well as holiday flats that have up to 5 or more bedrooms and are thus also ideally suited for a large family.
If you want to be close to a town centre or other important points, a holiday flat is often a good choice. On the other hand, a finca is a good choice if you want a holiday home that is particularly quiet, large or outside the typical holiday strongholds. A finca also offers more privacy, which is one of the reasons why many people choose a finca.
If you are really unsure, you can also do a test and spend half of your next holiday in a holiday flat and the other half in a finca, in order to find out for yourself which of these holiday accommodations is most likely to meet your own requirements. Because ultimately, a very good choice can be made with both when it comes to finding permanent accommodation for holidays in Mallorca.
How does the actual purchase of the finca work?
Once a finca or holiday home has been found that meets all requirements, the next step is to initiate the purchase. For this, the seller usually already has a notary on his side, who will draw up the purchase contract. At a joint meeting at the notary’s office, this contract is then signed and the cheque for the purchase price is handed over to the notary.
Therefore, it is important that by this time the Spanish account has already been opened and the full purchase price is in the account so that the cheque is covered and there will be no problems. If you do not want to have a Spanish account, you should check with your bank beforehand whether they still offer cheques and if so, whether they are also valid abroad.
However, if you want to save yourself a lot of hassle, you should make it easy on yourself and simply open a Spanish bank account so that you can pay the purchase price without any problems. Once the contract has been notarised by the notary, the keys are handed over either on the spot or at a later date agreed by the buyer and seller, which concludes the purchase.
The finca has been bought, what happens next?
Once the finca has been paid for, the keys have been handed over and the entry in the register has been changed to the new owner, you can move straight into the new finca. However, there are a few more things that need to be done. For example, registration with the local waste disposal company must be carried out, insurance for the house and contents should be taken out and a Spanish bank account should be opened at the latest now, from which all monthly and annual costs for the finca can be debited in the course of time.
If you want to rent out the finca outside of your own holiday times, you should also find out whether any requirements have to be met for this purpose or otherwise look for an agent so that holidaymakers become aware of your finca. This rental income can then be used not only for the running costs of the finca, but also for the repayment of the loan, if a loan has been taken out.
Whoever wants to rent out his finca should have a manager.
Not every finca owner can or wants to travel to Mallorca to check up on things after a holidaymaker has left the finca. However, before the next holidaymaker arrives, a basic cleaning must take place and the beds should also be made and any damage documented so that you know for sure who caused it.
For all these tasks, a caretaker is the right contact person. Such a manager will make sure that the finca is always in perfect condition, he will take care of minor repairs himself and, in case of major work on the finca, he will contact the owner and take the appropriate steps in consultation with him. Therefore, it always makes sense to have a caretaker you can rely on.
On Mallorca, there are agencies that provide administrators, but it is often worthwhile to check yourself whether someone is offering themselves for such a position on online portals. To ensure that everything runs smoothly, you should always insist on being shown references and if you speak little or no Spanish yourself, the manager should speak German or English so that there are no communication problems.
However, a caretaker’s duties do not only include maintaining the finca and ensuring that it is in impeccable condition for the next guests, but also that there are perhaps a few small items in the fridge when the next owner arrives and that the keys are handed over when the owner leaves the finca to other people for a holiday.
Likewise, the manager is often the direct contact person for the guests, so that the owner is not burdened with this either. So if you already know that you want to rent out your holiday home, you should look for a manager right after you have found the finca, who can take over the many important tasks on site when you are not there yourself.
Whoever buys a holiday home often has the manager included.
On Mallorca, there are many apartment buildings in which all flats are rented out as holiday homes. If they are owned, there is often a general property manager, as well as a cleaning service that takes care of all parties in the house. This makes it easier, especially for those who own property in another country for the first time, to cope with all the tasks that an owner has.
After all, things like a burst pipe or the like are already annoying when you can directly check on things, but those who live further away need to make sure that there is someone who can quickly intervene in these cases and this is done by the property manager or caretaker in the case of a holiday home.
This takes away insecurities and also leads to people owning property for the first time having more security. So if you are still very unsure about owning property in another country, a holiday home is often a good idea, because this way there is always someone directly on site to take care of any damage or other things that should actually be taken care of by the owner.
The costs for the caretaker are usually paid via an owner’s fund, so that these are also significantly lower than having to pay the caretaker for the finca out of your own pocket.
What are the costs for the finca in Mallorca?
As with all properties, costs also arise for a finca in Mallorca. These are not only the costs for the purchase, notary and possible conversions or the furnishings, but also the normal costs that arise for every property. First of all, there are the fixed costs, which include electricity, water, gas or oil for heating, as well as property taxes and waste disposal.
In addition, there are further costs for insurance, because even on Mallorca you should never do without house and contents insurance. If damage occurs, it is important to have such insurance so that the costs do not have to be paid out of your own pocket. There are also some insurance companies from Germany that insure properties in other EU countries, but it is easier to look for insurance in Spain.
If you have hired a lawyer to help you with the purchase of the property, you should also ask directly if there is a possibility to recommend an insurance provider. You should also get tips on which things should be insured in any case, because whether fire, storm damage or flood, everything has to be considered when it comes to choosing the right insurance package.
If you want to rent out your finca or holiday home, you should also make sure that the insurance company will pay if the damage is caused by a third party. In this case, you should also consider having liability insurance for owners, because if someone is injured due to damage to the finca, this insurance will cover the costs of medical treatment or compensation for damages, and the owner will not be held liable.
Can a finca also become a permanent residence?
It is not uncommon for people to fall so much in love with their holiday home that they would prefer to live there permanently. However, anyone who has ever owned a holiday home in Germany knows that there are also properties that can only be used for holiday purposes and this is also the case on Mallorca. Here it always depends on what is written in the purchase contract.
If it is stated there that it is only a holiday home, it cannot be used as a permanent centre of life. However, this is becoming increasingly rare, but should be checked when buying an older finca. With the modern holiday flats and villas on Mallorca, however, no one has to worry about this, because these can also be used as a normal residence.
However, this is an important point to keep in mind when buying a finca. It is not uncommon for retired people to decide to move to Mallorca to enjoy the mild climate and good air by the sea every day of the year.
If you want to buy more land, this is possible.
You have found the finca of your dreams, spent a few holidays there and now realise that perhaps more space is needed. If there is enough space on your own property, an extension is usually no problem. However, you should always talk to the local building authority, because there are also many building regulations in Spain that must be adhered to so that there are no difficulties later with the relevant authorities.
It is therefore important to clarify such matters, preferably before the purchase, but at the latest before the start of construction, because otherwise the extension may have to be demolished. However, if there is no space for an extension, there are ways to create more space. This is because fincas on Mallorca are often located at some distance from the nearest neighbour. This free land usually belongs to the town or also to one of the surrounding neighbours.
If it is not being used, it is always worth asking whether this land can be bought. Usually this is possible without any problems, but if the land belongs to the neighbour, one should first make one’s intention clear so that there are no disputes afterwards because the neighbour’s view may no longer be unrestricted. In any case, as a finca owner on Mallorca it is often much easier to buy additional land for an extension than it would be in Germany.
Once you have moved in, you can start to relax.
Buying a property always takes time and effort, this is no different in Mallorca than in Germany. However, you are quickly rewarded for this, because once the entire purchase has been completed, the finca has been furnished and everything is ready, you can treat yourself to a relaxing holiday in your new holiday home.
After all, the finca should be used as often as possible. Therefore, as the owner of a finca in Majorca, it is no longer only a good idea to spend a longer holiday on the island, but also a long weekend or just a normal weekend to relax in Majorca.
Since the costs for accommodation are now eliminated, only flights and meals need to be considered, which makes it easier to take a spontaneous short holiday. Likewise, the owners of holiday homes in Mallorca can give their relatives and friends great pleasure by spontaneously travelling to Mallorca and using the finca as accommodation.
Those who do not yet own a finca in Mallorca, but have the necessary finances and are often on the island anyway, should use their next holiday to simply contact an estate agent and visit a few fincas without obligation, because perhaps they will find what they are looking for and soon have a beautiful finca in Mallorca themselves.
Who wouldn’t like to have their own finca in Mallorca, perhaps close to the beach or in the flat interior or even in a secluded mountain region of the island? To be able to buy a property on this wonderful island, you not only need the financial means, but also a good estate agent.
Because an estate agent on Mallorca has a large network of contacts, has access to the relevant properties through his work, is familiar with the legal regulations when buying a property and can protect the potential buyer from legal pitfalls.
A great advantage of the real estate agent is also that he speaks the local language, which makes negotiations with sellers, state institutions or other important persons much easier.
How do I find the right real estate agent for property Mallorca?
If you want to buy a property in Mallorca, you first need the right real estate agent. In order to find this, one should first determine in which financial framework the potential objects may move.
Calculating a maximum price limit can save you a lot of trouble. Not everyone wants to buy a luxury property and therefore necessarily needs an estate agent who specialises exclusively in high-priced luxury properties.
After determining one’s own requirements (size of the finca, location, equipment, financial ceiling), appropriate candidates can then be selected. These can easily be researched on the internet. There are lists with the respective local estate agents.
The most sensible thing to do is to go to the estate agent’s homepage and find out about their company, their working methods and, of course, their portfolio. The market for Majorca real estate is large and even with the first search you can find out whether the agent has interesting properties on offer.
This gives you a first impression of whether the estate agent suits you. The purchase of a finca in Mallorca is usually not cheap and a lot of money is involved, so it must be ensured that a relationship of trust can develop between the estate agent and the client. If there is no sympathy, this is usually not possible.
Legal regulations and ordinances for Mallorca real estate.
First of all, there are basically no legal obstacles if you want to buy a finca Mallorca. Since Spain is a member of the European Union, as a German citizen you enjoy the same rights that apply to every Spaniard.
It is important to be aware of the taxes incurred when buying a finca. In principle, a distinction is made between legal entities and natural persons. In principle, the tax rate on the Canary Islands, also known as IGIC (Impuesto General Indirecto Canario), is 4.5 percent.
This differs from the tax rate that applies on the Spanish mainland. This is another reason for the great popularity of real estate on Mallorca. However, there are other taxes that must be taken into account when buying a finca in Mallorca.
If the seller is a legal entity in the legal sense, VAT must be paid, especially if the property is a new build. For a finca, the tax rate is 10 percent.
Buying a finca in Mallorca.
In addition to the VAT payable, the purchase of a finca is also subject to a so-called notarisation tax (Actos Jurídicos Documentados, AJD), the amount of which is between 0.5 and 1.5 percent.This notarisation tax must be paid to the respective region in whose territory the property is located. If the seller and the buyer are natural persons in the legal sense, the land transfer tax (impuesto sobre transmisiones patriomoniales) must be paid. This amounts to between 7 and 10 per cent. This depends on the region in which the land with the property is located.
Since 2006, there have been safeguards against tax fraud to ensure that those involved in the purchase of a property disclose and record their Spanish tax identification number NIF (Número de Identificación Fiscal) and the origin of all funds necessary to pay the purchase price in a notarised deed. Those who are not prepared to do so risk being refused entry in the land register.
Bargain Houses Mallorca
Anyone who wants to buy a finca in Majorca should not forget to file the annual tax return with the Spanish tax office after the purchase. Good advice as described in bellevue is important here to avoid the bargain turning out to be “unaffordable” in retrospect.
If the buyer has the so-called “residencia” or lives in Spain for more than 183 days a year, he is subject to unlimited tax liability. This means that all his assets and also his worldwide income are assessed in Spain. For German citizens living in Mallorca, the double taxation agreement in force between Germany and Spain must also be observed.
Overall, the administrative costs for the purchase of Mallorca real estate (lawyer, notary, land registry) can amount to about 3 to 4 percent of the purchase price.
Important rules when buying Mallorca real estate
In order to ensure that the research, negotiations and conclusion of the purchase contract run smoothly when buying a finca in Mallorca, the real estate agent has the task of advising his client on possible pitfalls. Such pitfalls lurk above all in the ownership of the property.
Before signing anything oneself or making a verbal commitment, both the valid purchase contract of the previous owner and the extract from the land register and a so-called cadastral reference should be available. It should also be clarified whether the seller has sole power of disposal or whether other persons are owners.
Buy a finca in Mallorca privately?
In order to avoid problems with the municipality, it should be checked whether all permits for the construction have been obtained, whether the specified dimensions have been adhered to and what the quality of the building substance is. It is best to obtain a certificate of habitability to avoid problems with the water and electricity supply.
Before concluding a purchase contract, it should be clarified whether there are any rental contracts for the finca. If this is the case, it must be checked whether the rental contract is registered in the land register and thus enjoys grandfather status.
If the rental contract is not registered, the new owner can terminate the contract with three months’ notice. It is essential to insist on the conclusion of a notarised contract of sale (Escritura Publica de Compraventa) as soon as possible. It is also important to be registered as the owner in the land register immediately. Only then are you the full owner of the property.
Finca on Mallorca
Working with a real estate agent in Mallorca is absolutely necessary if you want to buy a finca in Mallorca. He can take a lot of the work off the prospective buyer’s hands and his commission is out of all proportion to the costs that may be incurred if the purchase is unsuccessful. If you are interested in real estate in Mallorca, you should definitely not do without the knowledge and skills of an estate agent.
Buy a Finca Mallorca in need of renovation?
Of course, this only works with a large portion of courage. In addition, you should know the language and have a network of acquaintances and helpers on Mallorca.
Of course we are also happy to help here . . .