So you’ve decided to go for it, you’re not just buying any property in the Mediterranean, but one on the beautiful island of Mallorca. Perhaps you’re moving to the city of Palma de Mallorca, having fallen in love with the Old Town and its historical architecture and cobbled streets. Or perhaps you’re done with working and are looking to retire somewhere near the coast, the ports of Puerto Pollensa, Port Andratx and Port Sóller promise a luxury life of beautiful views and cosmopolitan community.
However, before you seal the deal and move into your new property there are some things that you’ll need to consider first. Particularly if you’re moving from abroad and are not familiar with the Spanish system, there are a few hoops you’ll need to jump through. Here we’ve broken them down into four simple steps and included a few of our trusted businesses, who will ensure that everything is done properly.
Get your NIE
Commonly referred to as your ‘nee-yee’, the NIE is your all-purpose identification and tax number, which you must already have by the time you sign the deeds of purchase. In fact you’ll need a NIE for almost any major transaction, also if you’re planning on spending more than 90 days a year in Spain. There are several ways to apply for your it: in Spain in person, via a Spanish consulate abroad, or through a representative in Spain. Even getting an appointment can take some time, though, and often for slots weeks or even months away, so be sure to leave yourself plenty of time. Using an agent can certainly speed things up and take the stress out of the process, but they can charge between one and two hundred euros.
If you’d rather do it yourself, once you have an appointment you’ll need to complete two forms – the EX-15 application form and the 790-012 form to pay the processing fee at a bank beforehand. When you attend your appointment, take these together with your passport or national ID card, with photocopies of everything. If everything has been done correctly, you’ll receive a certificate with your NIE.
HC Insider tip: If your Spanish is non-existent, best take along someone who can speak the language.
Open a bank account
Spanish bank accounts are available to foreigners who are both non-residents and residents, though resident accounts usually offer more flexibility and better deals.
If you don’t plan to live here permanently, though, a non-res bank account will make more sense. For this you’ll usually just need your passport, proof of address and document to show your employment status. If you are planning on settling here, it’s definitely worth getting a resident account, which also requires proof of residency.
There are about half a dozen different banks to choose from, which all offer broadly similar products and services. BBVA stands out for offering a fee-free account (surprisingly rare in Spain) as well as excellent English-language online facilities. La Caixa features non-residents perks such as free interpreter phone service and free legal advice, while Sabadell offers an account with free transfers in the EU (up to €50,000). Whichever bank you open an account with, none can compete with Transferwise for transferring currencies internationally.
HC Insider tip: The cost of banking in Spain is higher than most EU countries, so be extra careful when choosing as many charge fees.
Banca March is one of Mallorca’s greatest success stories, growing from small and local to playing with the big boys of banking – without losing integrity.
Choose a good lawyer
Using a lawyer when buying a property is vital, and it’s especially important to choose a good one to navigate you through the potential minefield of buying a property on Mallorca. Communication is key, so be sure to find one who is fluent in your native language, as well as Spanish – plus Catalan can certainly be useful.
Your lawyer should be central to making everything go smoothly, ensuring there are no legal problems with the property, helping with the required paperwork, and liaising directly with your bank. Lawyer fees are typically 1% (plus IVA) of the value of the property.
HC Insider tip: Be sure your lawyer is totally independent and working just for you. It’s better not to use law firms recommended by an estate agent or developer.
Property purchase or sale process; tax matters or estate management, María Garau Abogada is the lawyer simplifying Spanish law.
Bufete Staubach is one of the best regarded law firms in the Balearics, offering top-notch international service that is both professional and friendly.
Get a mortgage
While you could go directly to your bank for a mortgage, the most sensible strategy is to employ the services of a reputable mortgage broker. They will assess your situation, approach multiple lenders and present you with the best deals. Broker fees are usually around 1% of the mortgage amount (plus IVA).
Residents can generally borrow up to 80% of the property’s assessed value, non-residents are limited to 60–70%. Most Spanish mortgages are variable rates linked to the Euribor (European inter-bank offered rate) plus a margin.
HC Insider tip: You should allow up to 10-15% of the total purchase amount for various transaction costs.
The name for luxury financing in Mallorca is Lionsgate Capital. Managed by a team with the highest credentials, it succeeds in securing the best mortgages.
How you go about financing your Mallorca home. We asked an expert why getting a mortgage might be a good idea. Find out why.
With these 4 steps in mind, you can begin the process of buying your property in Mallorca. The Spanish system is notorious amongst foreigners for being slow, but with the right people on your side, it doesn’t have to be that way. We would always recommend going through a professional team, such as mortgage brokers Lionsgate Capital and lawyers María Garau and Bufete Staubach.