1. legal examination of the property (due diligence)
- Why is it important? In Spain, especially on the Balearic Islands, there are many properties with an unclear legal status.
- What to do?
- Hire a local estate agent to check the ownership structure, building permits, land register data, encumbrances and mortgages.
- Ensure that all construction work is legalized.
2. plan for financing and ancillary costs
- Why is it important? Service charges account for approx. 10-15% of the purchase price.
- What should I bear in mind?
- Real estate transfer tax (ITP): 8-11% depending on the purchase price.
- Notary, land registry and legal fees.
- For new buildings: 10 % value added tax (IVA) + 1.5 % stamp duty.
3. know your taxes and obligations as an owner
- Why is it important? Ownership is an obligation – also for tax purposes.
- What should I bear in mind?
- Non-resident tax (for non-residents, even without renting).
- property tax (IBI) annually.
- Letting? Then income tax on rental income + tourism license may be necessary.
- Advice from a local tax consultant is advisable.
4. choose the location with a vision
- Why is it important? The value of the property depends heavily on its location.
- What should I bear in mind?
- Good infrastructure, proximity to airports, beaches, cities.
- Building permits in coastal regions are more difficult to obtain today – existing buildings have priority.
- Clarify whether the property is located in a protected or rural zone (tricky under building law).
5. apply for an NIE number
- Why is it important? The NIE (Número de Identidad de Extranjero) is mandatory.
- What to do?
- Apply early – either via the Spanish consulate or directly in Mallorca.
- Without a NIE, no property can be registered in your name in the land register.
