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What do I need to know if I'm a foreigner and want to buy a house in Majorca?

Are you thinking on buying a house in Majorca?

Are you slightly lost and don't know the process?

From Nova Majorca we offer you a small summary that will for sure help you get an idea of the steps to follow.

Before we begin, make sure you meet the subsequent requirements:

- Apply for the NIE: As a foreign buyer you must have you own NIE (Foreigners Identification Number.) This is a number that the Spanish Government assigns to all foreign citizens for any economic transaction. This number is unique and non-transferable.

How do I acquire it?

Head to the Aliens office in the "Polígono de Levante." It is necessary to make a previous appointment and once there you will take, approximately, two hours to obtain your NIE.

How much does it cost?

The price is 9.45 Euros. The same Aliens office will hand you a specific form that you will use to pay at your bank.

Remember to take your passport or ID card and a copy of the same!

- Have a Spanish Bank Account: It is likely that you will need a Spanish Bank Account for the correct administration of the property.

Once the previous steps are met, the operation begins.

1. Kick off- Agree on a price: In most cases the original price does not correspond exactly with the final one and this is due to a previous debate between the buyer and the seller. This is normal and Nova Majorca will remain by your side to reach a good agreement. At his point, the operation begins.

2. Initial checks: Before buying a property and once settled on a price we should make sure it meets the legal criteria. Does it really belong to the seller? Is it subject to any liabilities or debts?

3. The Option to Purchase: This contract specifies the details of the property, following the agreed terms of sale, and is the contract that will we be presented before Notary at the end of the operation. At this point, usually, the buyer will pay 10% of the sales price upfront. This ensures a compromise from both parts as if the seller withdraws he/she will have to pay back the 10% deposit plus a 10% fee and if the buyer doesn't purchase, he/she will lose that 10%.

4. Financing: We must explore our financing possibilities before reaching the last part of the operation. This can take time and it is important that it is not left until the end.

5. Taxes: If the property is new you will pay the VAT (Value Added Tax) which consists of 10% of the acquisition price. These properties also require the Stamp Duty which constitutes approximately 1% of the price and that records the legal documents necessary to transfer the good.

If it is a resale property the tax to pay will be the Property Transfer Tax.

6. Legal Costs: Other costs associated with the operation are the notary fees, the real estate costs, the attorney fees, the mortgage costs, etc½ These can vary depending on the process followed.

7. Last step- Closure of the purchase before Notary: A sale concludes with the "Escritura" (public title deeds of purchase.) This includes the interchange of the official contracts between the seller and the buyer. Both must be present as well as the banks involved in the process. At this point the final payment is made and the property becomes ownership of the buyer.

Once the operation is closed, there are only a few procedures left such as the transfer of profits or the community expenses.

The process may seem complicated but Nova Majorca will pair with you all the way, showing you the best properties of the island. What are you looking for? A front line apartment? A luxury villa? Do not hesitate and consult our catalog, we will sure find what you are looking

Published: 28 Jul 2016
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