Understanding the expenses of buying a property in Mallorca
If you dream of buying a home, you probably also think: “What is the cost of buying a property in Mallorca?” If you browse housing ads in Mallorca, it’s a good idea to read along here, where we delve into the costs involved in purchasing property on this beautiful island.
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Please take a moment to watch the brief presentation in the video below:
Is it expensive to buy property in Mallorca?
The answer to that question depends on your finances, the type of home, its location, and condition. It’s essential to consider that for any given purchase price listed in ads, you should add a certain percentage for additional costs. Some optimistic salespersons might simply mention that there are a few extra expenses when buying a home on Mallorca.
Your costs depend on whether it is a new build (10% VAT on top) or a resale home (with ITP tax) and on the complexity of the purchase process.
As a rule of thumb, you pay somewhere between 12% and 15% above the purchase price. These extra expenses include a notary, deed, will, state trade tax (called ITP), registration fee, and connection fees for electricity, water, and possibly gas.
Legal assistance
It is recommended that your lawyer handles the documentation and gives you full insight into the costs. Your lawyer will also accompany you to the notary and act as the link between you and the bank, or between you and the estate agent. It’s wise to have your lawyer draft a will for you, as inheritance rules in Spain might differ from inheritance rules in other countries.
Professional legal advice should not be cut from your budget, as it ensures that the purchase process proceeds correctly, that your home is intended for habitation, and that you do not inherit the previous owner’s debt. Ask about the lawyer’s prices and experience with home buying in Mallorca. Ensure that the lawyer protects only your interests and has no connections to the seller or builder.
Many set up a Spanish bank account to facilitate the payment of various expenses for the home purchase and, in the long term, the fixed costs of homeownership in Mallorca.
Choosing a real estate agent
If you’ve explored different real estate agents and property portals online, you may have noticed that a home can be listed with several agents at different prices. This is common in Mallorca and differs from other countries.
Choosing an estate agent can be difficult, as there are agents catering to German, British, or Swedish buyers. Because a seller pays a real estate agent, many try to sell their home independently, which can make the housing market confusing for a first-time buyer. Many homes are advertised on Idealista.es or fotocasa.es, good starting points for your search. Remember that your lawyer is your close business partner when buying a home in Mallorca.
More about Cost of buying a prpterty in Mallorca after the video section
Video (will be updated)
“Buyer Brokers”
Though “buyer brokers” is not an official title, it is a common role in Mallorca. Your broker acts as your “searcher,” helping you find your home and assisting in the dialogue with the seller’s broker. Your broker is paid from the seller’s fee and is thus “free” for you if you are not signed up with all other brokers. We recommend contacting Homes in Mallorca for guidance throughout your home-buying process.
Taking out a loan
If your savings are insufficient and you need a loan, factor in loan costs and valuation, so the bank can determine the home’s price and advise on loan options.
The loan process may differ from other countries, and approval can take a few months.
There are many international banks in Mallorca. For our Scandinavian buyers, we particularly recommend Nykredit, who lends for home purchases in Mallorca, offering up to 80% of the purchase price or valuation (whichever is lower). The minimum loan amount is 100,000 euros.
For smaller amounts, you typically need to go to a Spanish bank, or you might borrow from your equity. It’s often cheaper to explore mortgage-free equity in your home country than taking out a loan in Spain.
Where in Mallorca is it good to buy property?
Hopefully, you’re now more informed about the question: “What is the cost of buying a property in Mallorca?” You can start intensifying your search and find your ideal area or city.
It depends on whether you’re looking for a finca in Mallorca, an apartment in Palma, or a residence in Sóller. Consider whether you want to live in the countryside, mountains, or close to the beach and town.Â
Visit areas you hadn’t initially considered and see your favorite areas in different seasons. An area in Mallorca can change significantly out of season. Read more upon the theme what is the best place to buy a home in Mallorca.
For more inspiration, we have a comprehensive overview of the cities and small villages in Mallorca here at Palmallorca.com.
Also, read about everything related to real estate transactions in Mallorca, including a quick guide to property trading and an insight into the purchase process.
Final Thoughts
How much is the cost of buying a property in Mallorca? The answer involves various factors and additional expenses, but with the right information and professional guidance, you can make an informed decision and find your dream home on this beautiful island.
Remember to visit our Facebook group “Mallorca Visuals” to discover authentic videos of Mallorca.Â
Explore our travel guides to Mallorca’s captivating destinations, from the vibrant city life in stunning Palma to the sun-soaked shores of Alcudia and Puerto de Pollença. Don’t miss the charming mountain villages of Sóller and Deià , where nature and tradition blend harmoniously. Also take a look at the hot spot for wine lovers – Binissalem.
Top photo to Cost of buying a property in Mallorca? © Nataliya Schmidt | Dreamstime.com
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