Moving to Mallorca? Legal, Tax & Property Insights

Transcript

Chapter 1: Introducing Fernando Martínez Comas and KPMG’s Services

Hello and welcome. My name is Helen Cumins and this is My Yorkca Living, a space dedicated to those who are dreaming of making My Yorkca their home. Today I’m delighted to welcome the senior partner of KPMG for the Balearic Islands, Fernando Martinez. He’s here to give his expert opinion about what it’s like to live and move to Mallorca. You’re very welcome, Fernando. Thank you for being here.
Thank you very much. It’s a great pleasure being with you. It’s very nice. I think you’re our first Mallorcan, I’m sorry to say, but we’re honored to have you here to interview on our podcast because normally we’re focused on the foreign market here on the island. But I thought it would be really wonderful to get somebody of your expertise to come and tell us about what it is like for foreign people moving to Mallorca, whether it’s to buy a home here or to establish maybe a business or an investment opportunity. So maybe you can tell us a little bit about what you do at KPMG.

Okay. Thank you very much, Helen. I didn’t know it was the first time that a Mallorcan was here. I would have prepared myself better probably. No problem. So I’m as you say the senior partner of KPMG here and although this is not a commercial for KPMG because I want to be here and just have a conversation with you and speak about this very interesting and passionate thing for me as well, dealing with our foreign clients. Basically what I do here is I’m leading the office. It is funny for some American people that we do legal and tax here because usually big four firms don’t do legal in the states. So we do it here. We have a team of 15 lawyers and we advise big companies in the island. For non-residents, it is good to know that there’s a very strong touristic business environment here. Most of the big hotel companies in Spain are based here, some airlines, and some tour operators and travel agents are here as well. So we provide services to all these companies and I’m leading the tourist sector for KPMG Spain. We also have a practice that deals with foreign people coming to the island, people that want to come and live here. Sometimes they want to move to Spain. They want to do the things that you do when you go to a new country. You want to buy a house, you want to take your children to school, you want to do normal things. So we help them coming here. Of course, buying the house is the most immediate and easy thing to think about, but sometimes we help them rent if that is what they want to do at the beginning, and we provide them typically all the tax advice because it is the main advice that foreign people coming into Spain need.

So we provide the whole tax advice together with this purchase, together with other things that happen. It happens sometimes that some of my very good friends and clients, one of them came like 20 years ago and told me that he was going to retire here. He wanted to buy a house, and now he’s my first client in his building company because he came here, he set up a company, it has done very well, and he’s still working here. It happens to many people here, right? That you find business people, they have done their business maybe very successfully in their home country and then they decide to maybe spend time here, but over time they see opportunities for investment and then somehow they also move into business here. It happens quite a lot. I think that people think about Mallorca as a holiday place and they think well I’ll be there and I will relax, and you do that. You get to have a very nice time here. What I tell to many people that live in mainland Spain is that every weekend here is like a holiday because I mean they come here for a short break and we have it from Friday afternoon to Sunday, you spend your life very relaxed here. But then they start seeing well there are businesses here, there are opportunities of investment, there is a lot of capital coming here, private equities coming to the island to invest in hotels mainly and real estate as you know as a separate thing to hotels, and that is what we basically do with them.

Chapter 2: The Advantage of Combined Legal and Tax Advice

That’s great, Fernando. What is the big advantage of having the legal and the tax under one roof? It’s an obvious thing that there are advantages. Can we talk about that? Because I think sometimes it’s kind of one really impacts the other, right? So how can you help a client because you have this advantage of offering both under one roof?
The main thing is you have to think on how clients usually come to see a lawyer when they want to come to Spain, to Mallorca actually. They want to buy something, a house. That is a very instinctive thing. At the same time you see a house that you like and you want to buy it immediately. And what we tell them is well take it easy. You want to buy a house but have you thought about all the other stuff that comes around it? You’re going to have some tax implications because the purchase of the house has them, but at the same time the fact that you are going to live in that house has also some tax implications in your own personal income tax, for instance your wealth tax, some what we call indirect tax as VAT or transfer tax. So you have to look at everything. We don’t see our clients as people that buy houses because that would be for us too short-sighted and at the same time it wouldn’t fulfill us. We see the clients as people that want to come to the island, they want to be either holiday visitors or they want to actually move into Spain and that they also buy a house. But the important thing is how they come here. When you go to a new place, a new country with a very sophisticated and difficult tax regulation as we have in Spain, because as you know we have central taxes that the Spanish government imposes on people living here or having assets here, but we also have the local taxes of the Balearic Islands and then the more local taxes of Palma, Calvia, Andratx. So you have three layers basically of complexity. Let’s call it complexity but probably not cost because well planned. What I tell to most of my clients is well you are an English resident, you’re an American resident, you pay taxes in England. If you come to Spain, you will pay taxes. I pay taxes and you pay taxes here and we still live here. So that’s not the big issue. The issue is to pay the proper taxes, not to start paying double taxes UK, Germany and Spain or the States and Spain which is crazy. So that’s why we see this as not that we are advising in tax and legal, but that we’re advising our clients and they have tax issues, they have legal issues, they may have labor issues. We have other clients that when they come here they set up a business and they have to start hiring people and they have labor issues and we can provide services as well.

One of the things that’s another level, let’s say, that you can offer that maybe others can’t is this tax advice from the home country situation as well as the Spanish. Can you tell us a little bit about how that actually works in practice?

Yes, of course. As you say, the advantage of being a big four like KPMG is that we have offices around the world. For the purposes of this conversation and talking about Mallorca specifically, in the States, UK, Germany, France, we have people coming from the Emirates as well and we do have offices there. What we basically do with our clients is we speak with lawyers in their origin country. Although I could try to advise probably poorly in UK tax or legal law, we don’t do that. We rather contact our colleagues in the mother country of this person and we work together with them. We issue just one proposal of work but it includes all the advices and we are in touch with them. It’s not like we can advise on that law, but we actually have a lawyer from for instance Miami in one of our recent deals that is advising the client on his tax in Miami, because his wife is also there, their tax in Miami and how this may impact the fact that they are moving to Spain. We don’t lose track of what is happening and we can do things at the same time in both countries. It is important to avoid paying high taxes in the States, for instance. You know that the system in the States is you pay taxes for your worldwide income no matter where you are, and it is important to do the transition smoothly in the proper year in the proper timing. Probably if you can’t reach that in a year, delay a bit coming here so you spend less than six months in Spain and sort it for the next year. So you need to work with tax advice in the origin country. Not legal probably, only some inheritance issues, but tax advice is crucial in the home country and the fact that you can offer this seamlessly through your network with Yes, we work, we are one firm actually.

Chapter 3: Why High-Net-Worth Individuals Choose Mallorca for Lifestyle

So what is the profile of your client generally? I’d say that they are most of them very, very high net worth individuals. They come here initially looking for a house. They’ve come here for holidays usually and it’s a lifestyle vision isn’t it that they’re looking for, and they see Calvia, Port Andratx perhaps. You were speaking about Son Vida. So they like the environment, they like the weather of course and the security that the island offers. Security because funny enough they are scared even in the UK, in London, in some places of the States, and it is true that this is really very secure. The fact that you can get here only by sea or by the airport, you have a natural border, so it is very easy to know who is here. It is really secure. The healthcare is fantastic. You know how many hospitals we have and most of it is public healthcare, so you feel protected here. The schools on offer now, the international schools. We have a number of international schools now. Very good. I think that in the last five, seven years it’s improved a lot, a lot. They’ve gone from there’s a lot more options, let’s say. We had two or three and now we have probably more than 10 or 15 international schools. The Rafa Nadal Academy is doing fantastic, although it is a bit far when you live here and you know it, but it is a very nice school as well. It’s so funny for me, you know, you’re Mallorcan now and when we say far, far means it’s more than half an hour by car. And then we’re like, oh no, it’s very far because we become island-wise. Probably you have changed your mindset there. By the same token, we could cycle there and it wouldn’t be a problem. But I’m just joking because to somebody living in London or Los Angeles it’s nothing to take an hour to get anywhere. To go to the other side of the island is very easy.
Yes. But that is life quality. When I have some friends that have changed that in their mind that half an hour is far already, it’s like well you are Mallorcan now because it is true everything is so close and that is also saving time, saving stress probably. So that is more or less what people are looking for and what they find here is all that. I think that many other things as we were saying before, a lot of business, the economy works and there are many things happening around businesses here and that you can actually work here. The commute to Europe is fantastic. We have now a lot of people bringing their families here and they still go two or three days a week to London or Paris. In my case my wife actually lives in Madrid and she flies every Monday morning and comes back on Thursday or Friday and that works very well and it’s good for a marriage. It’s fantastic for 15 years already. Well done. Well done. So you’d recommend it. But joking aside, it’s true that many people are commuting from here with the family and it is really a lifestyle choice in the end. They want to feel safe. They want to have a slower, more relaxed pace of life. They want to get out of the rat race a little bit.

Yes. And this is a very nice place for children to be raised because you were talking about English schools here or international schools. If you look at them, they are in very nice sports all trees. I’m thinking of Queens College for instance, it is a fantastic place and children really enjoy those places. Agora, now my daughter went to Agora for 15 years and she got amazing results with the IB. So actually the quality of the education system here it’s really high, very good, which is good. We’re very lucky to have all of this. But is this not the reason why Mallorca is so popular? And it just never ceases to amaze me how the market keeps growing. What is your opinion? And do you see the property market continuing to grow? Because as you’re local, you have seen all the changes all your life and I’m sure you must say it’s incredible how it just keeps going.

Chapter 4: Navigating Mallorca’s Growing Property Market and Early Pitfalls

It is. Yes. It is difficult to see the end. I have a very good friend, a very close friend, an architect that 30 years ago he told me Fernando this is Monaco, Mallorca. We have the land that we have and prices are going to raise all the time because it is impossible to build more. That is what it is. And if you come to your house here, you see the number of renovations of houses around. I think that this is happening. This is the next thing that is happening, the renovation of houses and how well literally every house on my street over the last 25 years it’s been knocked down. Some rebuilt once, twice, and even three times. It’s crazy. And that is making the price increase as well. But I think that there we have that very high-end life that you can have here. In the areas, three or four areas in Andratx, Port Andratx of course, Son Vida, I think that Bendinat, probably Costa is now very popular and probably Deia and maybe to a lesser extent Port Pollensa now. Deia and Port Pollensa is starting and the problem with Deia is that the coast as we call it here has problems with renovation licenses. You have to be very careful that area is a protected area and rustic area protected and rustic both. So it is difficult to buy there and it is very difficult to renovate. So you have to be very careful there. That’s why and actually I think that people that want to come here for the lifestyle, my view and this is an opinion, I’m a lawyer having an opinion, is that people going for the lifestyle rather come to Port Andratx or some areas of Calvia or Son Vida because they want to actually be part of what is happening here, so you need to be close to Palma, close to the sea. That is more or less my feeling. And is this going to end? I don’t think so in that part of the market.
What we see are other problems that are probably not applicable to what we are talking about, which is a problem with houses for people living here, a shortage of rental accommodation and affordable housing. Yes, that’s a problem everywhere. It is, it’s a global problem. Well, in Europe it’s a huge problem. This problem here was linked, and I don’t want to go too deep into it, it was linked to the holiday rental houses apartments and this has been forbidden in the island. You cannot rent a flat or an apartment as a holiday rental. So that supposedly will help to release some of these houses to the market. But this is a problem. But what we are talking about which is this market for people wanting to come to the island to live and have a house, prices are rising all the time. I have another client who years ago used to say seven millions are the all five because he was a promoter, he kept increasing prices because the market was increasing and in a matter of a year suddenly it was 30%.

Well, this is what’s happening. Somebody was telling me that a house that was considered highly priced two years ago is now at kind of oh now it’s at a good price because actually if they haven’t increased it you know the market’s caught up. So it just kind of reinforces the confidence for investors here that we’ve actually only seen a growth and as you rightly say with the island situation no more land, very strict regulations, it’s true right. It’s like the licensing of new builds and so on. It’s very very tight.

Yes. And actually you see renovations more than knockdowns of houses because they are still taking profit of what existed there. In Palma, Calvia, Andratx you can only build two stories and one underground and you can find houses with three levels, two undergrounds, and they are taking profit of that. So they renovate those houses, they improve the skill as well.

So what about for I mean it can be a complex transaction when you’re buying here especially without having the language, without knowing the legal situation. In your experience of being involved in these kind of transactions, what are the typical problems that people come up against when they want to buy a property on the island?

The first problem that they have and it is not a legal or a tax problem, which is a situation or a personal problem, is that they don’t have advice and independent advice. Something that we have spoken about, I think that this key person being able to advise them on this is what you need. Look there, don’t look. I remember it’s kind of navigating for them, isn’t it? Don’t go there because of X, this could be a problem because of this. And this is kind of the service we try to provide to our client, not like selling them a house. The first step is figuring out where on the island is your place. Because they come with this idea that a 45 minute commute is fine and they may end up living in Manacor when they want to take their children to school in Palma. It’s like are you crazy? This doesn’t happen. It doesn’t work like this here. If you want to live in Palma, look up for a house close to the city. You don’t know what you don’t know. That’s absolutely. I have found clients looking for houses more than an hour far from Palma, an American guy a couple of years ago. I tried to be that person with him, say are you sure? This is what you want? You want to live here? Have you looked at the island? When he came here and he looked around he said well maybe I need to be closer to where I want to be. So this is the first thing that is key, to have some advice on what the island is. Where do you want to live and spend your time here? And then of course when they want to come here, first thing is that you need to know what they want to do with their lives. Do you want to move to the island with your family? Are you going to take your children to school here?

Chapter 5: Navigating Paperwork, Financing, and Tax in Property Purchase

How much time do you want to spend on the island? Are you planning to use the property in summer or winter all year? That’s it because that is very important. And then when you actually go to buy the house, of course things that are very kind of logic. You need to see all the paperwork of the house, probably paperwork when it was built. We always recommend our clients to do a technical review of houses here because as you say, houses have been renovated one or even two times and not all of them with the proper licenses. You have to look at if you’re buying rustic or urban land. That is very important especially with American and English clients because after Brexit there’s a regulation here that applies to English and Americans that you have to ask for a permit to buy in rustic land to the military kind of government and that takes time. Sometimes people rush into signing something because the real estate agents who are fantastic but sometimes rush into signing options. They sign an option for a month, two months and the client needs three, four months to get the permit and it doesn’t help to work with this kind of stress. Then things that are also very easy but at the same time complicated as getting tax entity numbers here you need an it is called sometimes for English, non-European clients looking for the proper visa and residency permits. Unfortunately the golden visa has disappeared here which was something that was useful and actually I think it was a clever way to promote investment in the islands. It has disappeared.
So basically these are the main things and the financial side, the mortgage, whether somebody is deciding to use their own capital or there’s tax benefits, there’s legal implications. So there are many facets right that people need to actually have kind of a big picture and also an inheritance tax, wealth tax, all of these things.

Basically with financing, we typically see as well that our clients have the money available to buy because this is their second house or they have sold somewhere a house where they come from and there are tax implications. Of course you know that we have wealth tax here and you have to look at this tax. I’m not going to advise in ways of avoiding paying taxes because you have to pay the proper tax, not in excess. Sometimes it happens that it is more beneficial for the client to actually have a mortgage on a property. The rates here currently are very, very competitive. We are around 2%. Which clients of high net worth they say why would I use my own money? I can have a higher return on my own money. Seven or eight. And then pay this 2%. And actually we’ve even had clients with better than 2% because they shopped around, they negotiated, there’s a lot of potential.

Absolutely. With this financing again I would advise people coming here to have an advisor on this. We help them signing and negotiating the mortgages but we don’t look for financing typically. There are really good specialists on the island and the advice is look for them because the saving that you can obtain only in wealth tax. I made the calculation for a client a house he was buying around for around 12, 13 million and the cost of wealth tax for that house if he had paid it with his own cash was around 300,000 per year which was crazy. While if there’s some financing there, as you say you can use your own money for other things, you have a mortgage, you pay the rate which is not very high and you save a lot in wealth tax. Absolutely. So it really makes sense to have this information and that’s what we also try to do is be the center point to then be able to make the recommendations, open the door to good financial advisors, good tax advisors, good legal advisor. You know, it’s all these different facets that people need when they’re thinking to move here. But of course if they don’t have a network where will they start?

Chapter 6: Real-Life Examples of Property Buying Mistakes and Irregularities

And the worst thing is when they realize that they have done everything wrong. I’m sure you can tell us some examples of like where you’ve maybe been asked to resolve situations where people got bad advice in the past.
Yes. Not going into great detail specifically, but just to give us a kind of an example of what can go wrong.

This client, thanks God didn’t go wrong at the end of the day. This calculation that we did it was as I said they come here they see a house they want to buy it immediately. I love it. Sometimes you find people that have signed everything before coming to us. I remember an English client who had signed the option for a very nice house in Pollensa, really nice house in Pollensa. More than half of it was illegal and built on rustic land. He was from the UK and it happened a couple of years ago. So he couldn’t actually comply with the option because he didn’t have the permits from the military. The house was completely illegal, more than half of the house. If it was 700 square meters, around 400 were illegal. In that case would you just say to the client don’t do it? Well, we told him don’t do it and we had to negotiate with the seller. First thing in those cases you say don’t do it and it is not easy to say that to a client that has already paid something because somehow he has to reclaim this amount. In this particular case it happened, there are always lawyers around saying don’t worry we’ll sort it. Oh, we’ve all heard these stories. Yes. I know the mayor. I know the and that terrifies me because it is not going to end well. I promise you it won’t end well. In this case we said don’t buy it, forget it. We’ll reclaim the money. The house is illegal. We’ll start properly. We’ll start looking for a proper house that is legal. We’ll do our due diligence on this house and we’ll find a house for you. Don’t worry, we’ll help you. He was very focused on that property. He changed lawyer because we told him all that and he couldn’t buy and that was an absolute mess.

That is something that happens many times. Other times it happens that they sign, this client or our future client signs this option rush because some agent is telling him that he’s going to lose the property and we have to reorganize everything because he doesn’t have any paperwork done. He doesn’t even know if he’s going to move into the island and so everything is very chaotic and but they already have a contract. It’s like wow, why did you start signing this? Let’s relax, look at it again and start from the beginning. A lot of examples of people going to pay with their own cash loss of it. We have another source of problems which is people buying houses that are still not finished. They are told that they will be able to buy to occupy them say we are in January now, the house is going to be ended in February, they will be able to move in February and they don’t have the final deed. There’s a tax issue in Spain which is that until the house is completely finished, the VAT on the property is 21% because it is an unfinished villa. When the house is finished, the VAT is 10%. So there’s an 11% difference that in houses of 5 million is more than half a million euro. Nobody tells them. When you get to start working with them because they come with this option, you have to explain them. I remember a client that had to wait 8 months to use his house and he was desperate. I mean throwing millions of ideas every day, why do we do this? It won’t work. You have to wait. The problem is the person that told you that you were going to be able to live in that house before having this. Sometimes to be fair to the promoters, it’s out of their control as well. They could have done everything but it depends on their local town hall. They have to wait for the final inspection, then it has to go to the board or whatever, and be approved, and then it goes through. It can be a long process. Even the house is 100% ready, but the paperwork isn’t completed. Absolutely. With all the furniture because these houses as you know are sold with all the furniture so they look fantastic and they see the house, they see the blankets and why can’t I sleep there? It is a problem of managing their expectations. It’s frustrating and many times this is a surprise. It’s not something that really comes out in the negotiating.

No. Nobody mentions because nobody wants to put that on the table because it’s going to be a problem for closing. This also happens sometimes with clients that buy a plot of land to build their own house and that is a nightmare.

Chapter 7: The Challenges of Building and Understanding Local Pace

We actually generally try to steer our clients away from this. We say these could be a second option or a third option years down the road, but not your first experience of the island because as what I’ve learned over 26 years I’ve been here, you need time to understand how does it work here on the island and who are the right people to deal with. Even we have the best builders, architects, interior designers, everybody. We have the whole network. But in the end, it’s very difficult for somebody who’s not familiar with the cultural way of how things work here and the rhythm and the pace because patience is a word that’s mentioned so many times on this podcast and you just don’t know these things in advance. So we say take the easy option, land on the island, buy an easy nice home to live in. If two or three years down the road you decide you really want to build your dream house, then you have time and you’ve built your network and you’ve figured it out. It’s true, right? Or would you agree with my advice?
My experience is that I’ve been refurbishing my house too for two years already. I’m still there. I was able to move in but still doing things. As you say the pace is different. That’s why you moved from Madrid here, right? I was born you are from here but you were living off the island. Yes, I lived in Barcelona, Madrid and some other places and I moved here because of the place. I love it here. I love how things happen here but you have to understand them. There are some words that are important here which is tomorrow, everything is tomorrow. Mañana, mañana. I’ll tell you something, don’t be troubled. Don’t be troubled about it. And you are troubled about it. So this can’t be your first option. Absolutely. Managing licenses in a town hall can take two or three years and nobody can really, it doesn’t necessarily follow the logical steps and sometimes it’s just outside the box and you’re like I can’t understand this. We have clients at the moment even they’re trying to buy a house and it has a license but they can’t find the license and they’re in negotiation with the town hall and it’s so frustrating for these clients because it defies logic and they’re saying we love this house, we want to have this house. If for instance you want to buy something in Calvia, they weren’t necessarily very quick. They were okay, not the worst place to deal with the town hall but they had an informatics attack two years ago and everything disappeared. So you can’t ask for an old license to Calvia. So now all the plans are lost. They are working very hard, I know the people working there and they are doing a fantastic work trying to recover everything but everything has disappeared. So this lack of information, lack of history is very frustrating. When you have to buy, the very logic way is well ask for a certificate to the town hall that the house is legal. Forget it, it will never come. So you have to be very creative and have good advice. Not selling our product but be advised here because it is basic not only to go to a notary, somebody who is able to prepare a deed and accompany you to a notary but have all the proper advice beforehand.

If you do buy something with irregularities, because let’s be honest there’s different levels. Foreigners when they come here depending on the nationality they have different levels of fear. Of course in their home country they would never dream of buying something that’s not 100% legal and so on, but here in Spain it’s not so. Fear always, what is real and what is not such a significant issue because there is definitely a gray area here.

You need a good advisor to really say this is the worst that can happen. This is probably the most likely scenario. But you decide, you’re getting the full picture. Is that a fair thing to say?

It is because there’s nearly always something shows up. I have a client, an English client, very good friend, very funny guy, who builds houses. I remember a year ago he was going to sell a house with some parts which were illegal, brand new house, but you know what happens here. People built and there was some space. So they added a little bit. Because you can add it because it is hidden and then you open it. It is probably natural. So the client I think he was German, the buyer looked at the house and he said well but this is illegal. And my client who has already become Mallorcan said well this is a bonus space. So you have extra space for the same price. I should charge you more because this is an extra space that you’re not counting in the land register. So the client was shocked like I was going to negotiate down the price and you want to negotiate it up. Crazy. And as you say that’s the cultural difference. Absolutely. Between English and Germans as well because you know that we are Spanish, we are different from the English, Americans and Germans and that is a cultural difference and absolutely a Mallorcan way of looking at this issue. Answering your question, of course there are levels of irregularity. There are irregularities that especially when you are buying a house and your intention is to refurbish, you have to be very careful and be advised by a lawyer and by an architect. We usually work with architects when we have this kind of purchase because given an example in Calvia, if you are there there are houses, I was saying that they only allow two levels of houses. So you can’t probably refurbish or expand the third level when the existing house already has it. So sometimes you see reformation projects that are doing everything and you have to think well careful because that third level may not be able to be expanded or extended or even touched sometimes. So that kind of irregularity is something that concerns because it affects the whole project.

I agree with you totally. If somebody’s buying a project, a house with the idea of making a major reform, they need an in-depth study by an architect because there’s so many variables at play. It’s not just, here’s the regulations and if I stick with these, but there’s many variables to this, boundaries, swimming pools, touching boundaries, and even the land, the height of the land versus the road to the distance, so many things.

Everything. And that is something that afterwards is impossible to fix. You might buy it thinking I can do X, Y and Z and actually you can’t at all because you didn’t get advice. That is really frustrating because then your dream house is not there and it’s like wow, what do I do with this? And you start with all the trouble of well I want to sell it, difficult to sell, what do we do with the profit because actually there’s a tax issue there, looking for a new house and that becomes a bit. That’s what we always tell our clients, that we really want you to make the right decision because it’s very costly to make the wrong decisions. If you want to very quickly, having paid all the transaction costs and so on, and then turn around and want to resell, it’s very difficult without losing money, right?

Yes. Because immediately when you buy one of these used houses, you’re paying around 12% of transfer tax. That means that if you want to sell just to stay even you have to increase price in 12%. Which is not that automatic. That is a significant increase of price. You probably paid your legal costs, registration, probably an architect and then you have your new property, if you buy it you have the same cost again. So in actual fact it’s really a lot of money if you make the wrong decision here. That’s what I like of what you do, that you can advise the client and you are not under the pressure of a buyer because that is what happens sometimes with agents that they have the product and they want to sell it because that’s their job, they’re selling. Yes. Absolutely. And what we offer is a service and that’s the big difference. We’re not selling something. We’re offering the client a service to make a good decision. It’s a big difference.

Chapter 8: A Glimpse into Fernando’s Personal Life on Mallorca

So, Fernando, I want to talk to you about your more personal side of life. So you live now, you’re back living in Mallorca. Where on the island do you live?
I live in Costa Blanes now. Lovely. Beautiful. Yes. I’m surrounded by reformations. Well, similar to Son Vida, it’s a permanent building site, right? It is permanent. When one finishes, the other one starts. Actually I’ve been the one starting because we have been doing some works in our house for a couple of years now. I live in Costa Blanes. I used to live in the center of the city and we moved there after 2020, after Covid. Were you in the city during the lockdown? I was just by the city in a small house because it was the house coming from Madrid. We didn’t know exactly what we were going to do and in 2020 we bought in Costa Blanes and we have moved there and it’s fantastic. What do you think of Costa Blanes? I like it very much. It’s very central, very accessible to a lot of areas. Costa Blanes is in Portals Nous for anybody who’s not familiar with the area. Which international school are you sending your son to?

Yes. To Queens. My son and my daughter. I have a daughter and a son, an older daughter. She’s 15 and a very young one. So both are in Queens. Both of them. And are you happy with the school? I’m very happy. This is a very familiar place. We all know each other. It is true that we have seen the change in the last years. I’ve been there for 12 years already and another 12 to come or 13 with the young one and we have seen how it changes and it goes with the number of people coming to the island. They have doubled the capacity. They used to have one class per year and they have two now. But they are fantastic. It’s considered one of the best international schools on the island. It is. But as you were saying, there’s a fantastic level of schools here. Agora is fantastic, Queens is fantastic. There are other very good schools here. As you were asking, I like it there close to the school. It takes me like seven minutes. And then you go to your office in Palma.

I work in the center of the city. That is important here to be in the middle of everything, close to the notaries, the court, land registers. So we have our offices in La Seu. What I like from Costa Blanes is what you were saying, in weekends and summer I don’t even touch the city because I live more focused in Calvia, Palmanova, Magaluf. There are a lot of restaurants around and of course it is very close. So what is your typical weekend?

With children is being with them. I like to ride as you know, I like cycling and I try to cycle every morning if I can, every Sunday and Saturday, and not always easy but at least on the weekends you manage it. So where do you head from Costa Blanes? What’s your favorite route from Costa Blanes? I usually go on the sun route, another client English client calls it. It’s going to El Toro, Santa Ponsa which is beautiful around by the coast. Around by the coast out to Andratx and then you can return. That doing a short very nice, very beautiful. Do you sometimes go to Sant Elm? It’s lovely going down but kind of you have to go back. I sometimes do it but that is the very I usually go alone because I have it very difficult to plan with people with children. There is an advantage to going alone because you can just leave the moment you’re ready, right? And you’re not under pressure time wise. I love stopping for breakfast. Me too. So maybe one day we can go cycling. We can go. Absolutely. But nobody wants to stop and I love it. I can leave here and go to cycle to Sant Elm. So it’s 35 km there and 35 km back and I stop for breakfast. So I can definitely be your breakfast buddy. So I’ll call you. I can only Saturdays and Sundays because I have No, Saturday or Sunday is good for me also. We’ll do that and I love it here. Not too early. So I’m fine with that too. You don’t need to get up too early for that. In reality I love sports and I think that we live in the best place in the world for that. I do a lot of triathlons as you know and it is a nice place to swim, bicycle, running in the mountains around here, this mountain is fantastic. At the back of Costa Blanes, people don’t believe it but it’s one of the nicest walks. From Hanover for example you can walk all the way. We have a climb in Costa Blanes to the antenna of Pera and you have fantastic views and it is very nice. It is a great place. So my weekend is doing some sport and then just enjoying the simple life here. In summer I have a boat, I love sailing and it is also a fantastic place for that. The waters are very calm in summers you know. The local perspective, they have their main house, they generally have a place in the mountains and a place at the sea. Is that your dream to have something or you probably through aunts and uncles maybe have these already well accessible from the family?

I don’t know. As you say, it is very funny because one of my neighbors, he’s the father of one of my daughter’s schoolmates and he lives in the center and he spends his summer being my neighbor. So it’s like in Costa maybe 12 and but that is not my dream. I like it in Costa and I love skiing as well a lot. I absolutely love it. I was more looking for a house in the mountains, but not here, probably in mainland, in Baqueira. That is another very good thing about the islands. I mean it looks like we are selling the island, but it is as marvelous as this. There are a lot of flights if you want to go skiing. I was yesterday looking with my daughter because we have a short break of four days and we were thinking well we can go to Turin, we can go to Geneva, we can fly to Jada which is close to Vera. So you can choose wherever you want to go skiing as well. We were talking to another interviewee and they said that skiing is maybe the only thing that’s not possible on the island because everything else you can do. But it is closer than in Madrid. I went skiing in Christmas and we took our car in Madrid to Baqueira which is a big resort in Spain, probably the biggest in Spain and it took like seven hours to get there by car and I can be skiing in Geneva in three and a half hours from here. The connections are great. The connections are fantastic.

Chapter 9: Fernando’s Key Advice for Moving to Mallorca and Final Thoughts

Finally, Fernando, you’ve been amazing. Thank you so much. I just want to ask you, what would be your advice to somebody who’s thinking of moving to Mallorca? What would you advise them to do as kind of preparation for that?
Well, and I’m not here to sell KPMG or your business, but my advice for them first is to contact with somebody like you. I think that is key. It is key to know where you’re going and what you are going to find there because it is not easy. It is not an easy culture, not an easy economy, not an easy tax system. Then going into the very competitive market of buying a house. If you only have the advice of a real estate agent, a lawyer, a friend who has already come here, but of course it’s not professional advising you to come here. So first thing is to contact somebody who can help you arriving and understanding. Second would be to actually get advice on the Spanish tax system. It is not as bad as they say it is. It is not that expensive but you have to look at it properly because sometimes people speak about Beckham law for instance. You have to think about it before going and rushing into things. I remember clients asking for the golden visa and they were not interested in golden visa, there were other ways of them obtaining the same thing. So the advice is to get advice upfront.

Of course, before because some people are very surprised how quickly they find their dream home and then they’re not ready actually to move fast enough and then as you say it’s very competitive and you’ve wasted a lot of time.

Another advice is that your dream home is not always the house that you thought it was going to be. I have a client who is not buying in Mallorca, he’s buying in mainland in Marbella. He came looking for his dream home and this was his expression actually and he found one and I was telling him don’t rush into that. That was not my business, my business would have been hey go buy this, here’s my invoice and finish it. I was telling him are you sure? Maybe this is too far. And he said, “Fernando, you’re right. I’m going to rent.” He came, he has rented a house. He’s going to be with a rental house for a year and looking now for advice in Marbella. He wants to understand the place and then move here. So don’t rush and get good advice beforehand because sorting things when they have gone wrong is very difficult here, very expensive, and very stressful, which could be avoided quite easily.

So my final task today is to ask you our quickfire questions. So do you love beach or mountains? I love beach in summer, mountains in winter. Good answer. Sunrise or sunset? I love sunrise. And summer heat or winter calm? More summer heat. Siesta or fiesta. I’m very early bird. I always get up very early because I love cycling. So I’m more a siesta person. Pamboli or Ensaimada? Pamboli 100%. And north coast or south coast? I love both, but the whole island is fantastic, but I have to choose is north coast. North coast is very beautiful and actually very interesting for sailing and diving. I do also scuba dive and it is fantastic for scuba diving. You really take full advantage of everything that life offers. So I wish you many more years of happiness and prosperity and all the good things that life can bring. And thank you so much Fernando for being here.

Thank you very much Helen. It was a great pleasure being with you. Thank you.

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