Buying Guide Details

Buying Property in the Balearic Islands (Islas Baleares)

Overview

The Balearic Islands have been very popular with overseas property buyers since the early days of the package holiday in the 1960s. Having had a taste of the terrific climate, stunning beaches and spectacular scenery that these two island groups have to offer, holidaymakers became property owners with their own summer getaway or retirement property in the Balearic Islands (Islas Baleares).

There is great diversity within Spain’s islands – brash resorts, tranquil rural idylls, exclusive homes in the mountains, beach hideaways on secluded coasts. Some of the islands are easily reached direct from the UK; others are harder to get to, requiring connecting flights or ferry services.

Where to buy property in the Balearic Islands (Islas Baleares)

Property in the Balearic Islands (Islas Baleares), off the east coast of the Spanish mainland, is relatively expensive in Spanish terms. The islands of Mallorca (Majorca), Ibiza and Menorca (Minorca) in particular have a large number of high-quality properties, with prices to match, but there are more affordable properties there too.

Ibiza and Mallorca both attract a diverse mix of well-to-do and full-on partying holidaymakers – the excellent climate and beaches and some world-renowned nightclubs combined with stunning landscapes and natural beauty provide an environment to holiday, and live, to a wide audience. There are rental opportunities for property owners in the busy resorts but the quiet areas outside them are largely untouched by the tourist industry and retain an idyllic tranquillity.

Menorca (Minorca) attracts older property buyers who enjoy its quiet pace of life. The British have a love affair with the island and a large number of properties in Menorca (Minorca) are sold to property buyers from the UK. Formentera, the smallest island in the group, is quieter still, totally uncommercialised and only accessible by boat from Ibiza – a real island getaway!

Property in the Balearic Islands (Islas Baleares)

The Process of Buying Property in the Balearic Islands (Islas Baleares)

Anyone wishing to buy (or sell) a property in the Balearic Islands (Islas Baleares) must first obtain from the state – in person – a fiscal number for foreigners known as NIE (numero de identificacion de extranjeros)
Once the property buyer has received the NIE number, the property buyer’s lawyers can make an offer on their behalf. When a price has been agreed, it is recommended that both parties sign a preliminary agreement which outlines details such as the completion date
A deposit of 10% is the normal amount placed to secure the deal. After this, if the property buyer pulls out they lose the full deposit but, should the seller decide not to go ahead, he/she must return double the amount of the deposit – i.e. 20% – to the property buyer
If buying a property in the Balearic Islands (Islas Baleares) off-plan, it is usual for payments to be broken into stages, the balance being paid when construction finishes
On completion, when all the necessary checks have been carried out, both parties sign the escritura (title deeds) in the presence of a notary. The property buyer then pays the balance, plus all other fees and taxes. Copies of the deeds are sent to the Land Registry and the tax office.

Homes Overseas Property Club

Homes Overseas has joined forces with a collection of IFA specialists to form the Homes Overseas Property Club (HOPC), designed for existing and prospective overseas property homeowners.

The Club – which has access to international lawyers in no fewer than 43 different countries - has been set up in order to guide people through some of the various issues relating to buying and maintaining a property overseas. It offers advice on a range of topics, including financial, legal, insurance, taxation, property management and foreign currency matters.

For further information please telephone 0845 838 7142 or email info@homesoverseaspropertyclub.com

Fees & Taxes

Taxes and fees usually amount to around 10% of the total purchase price of the property in the Balearic Islands (Islas Baleares)
Taxes payable depend on whether the property in the Balearic Islands (Islas Baleares) being purchased is new-build or resale. Currently, transfer tax of around 7% is applied on resales, which includes stamp duty. For new-build properties in the Balearic Islands (Islas Baleares), VAT (IVA) of 7% is payable in addition to 1% stamp duty
On top of this there is also plusvalia (capital gains tax), which is set by the local authorities and depends on the area concerned and the amount of profit being made on the sale. This is usually paid by the seller
If the property buyer is purchasing land or commercial property in the Balearic Islands (Islas Baleares) rather than residential property in the Balearic Islands (Islas Baleares), VAT is 16% as opposed to 7%. Stamp duty remains the same
Most Spanish lawyers charge around 1% of the final purchase price, and notary fees are around 0.5%
Agents’ fees can vary anywhere between 2% and 15% – so be careful not to be ripped off

Property in the Balearic Islands (Islas Baleares)