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So, you have been thinking about buying a property in the Balearic Islands, have you?

So, you have been thinking about buying a property in the Balearic Islands, have you?

11/01/2021

Here, at Illeslex Abogados, we’ll do everything to ensure that you get all the information that’ll let the purchase of your property go smoothly, quickly and most importantly, safely!

The Balearic Islands really are a paradise, an extremely sought after area by people from all around the world. You could even say it’s their dream come true. At Illeslex Abogados we’ve helped many people to achieve that dream – no fuss, no trouble and no surprises.

A lot of that has to do with our 25 years of experience, not to mention our dedicated team of professionals. We see the real estate market as our specialty, and we make sure we’re up-to-date on urban planning laws and everything else. That’s why our overseas clients choose us when it comes to handling their local property deals – whether they’re big or small. And the fact that we speak English, German, French and Dutch is another bonus.

When it comes to investing in Spain, what you need to do first is apply for the (NIE),  that’s the Foreigner Identification Number.

Once you’ve found your dream home, we’ll check everything out with the local authorities. That includes looking into the Property Registry, enquiring at the Town Hall, and reviewing everything at the Cadastral Office and so on to verify its correct registration, that it’s free of any pending charges, as well as confirming its urban planning legality and that everything is a true reflection of the real property itself.

When it comes to notaries, it’s well worth remembering that, unlike other countries, in Spain they do not provide guarantees that the property is free of urban issues.

Once we’ve checked the administrative paperwork, we negotiate with the seller and their lawyers, which bring us to the purchase option contract. This doesn’t mean the transfer of ownership, it is merely the right to buy - after having paid for that option - and means there’s an obligation to sell, within a predetermined period of time.

The final stage is when a notarised deed of purchase is signed. Then, after the payment of the corresponding taxes, it will be registered in the Property Registry in the name of the buyer.

The costs derived from the acquisition include lawyer and notary fees, as well as the fees of the Property Registry and the taxes that are due for the purchase.

You should bear in mind that the tax rate applied depends on whether it is a new property or a pre-owned property.

For instance, if you purchase a new property, it is taxed with VAT, at a rate of 10% and with the Stamp Tax (IAJD), at a rate of 1.5%.

On the other hand, if you purchase a pre-owned property, the purchase is subject to the Property Transfer Tax (ITP). That rates varies between 8% and 11%, depending on the purchase price.

 

Once you own the property, don’t forget there are taxes and rates to be paid annually. These include the property tax (the IBI), the trash collection tax and the state income tax for people who are not residents. It’s known as the IRNR. It’s worth remembering that in the Balearic Islands, luxury properties are also subject to wealth tax. Don’t worry, our service includes the calculation and annual payment of both state taxes (the IRNR and the IP).

By complying with all these steps, you can rest assured of a safe and surprise-free purchase.

Our clients fulfill their dreams, and we are proud to have their trust!

 


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