It is a clear fact that foreign capital is strongly committed to the recovery of the real estate sector in Spain. Fundamentally since 2014, several firms have entered in Spain through the purchase of office buildings, shopping malls or logistics complexes. Subsequently, several funds landed in SOCIMI’s that have raised more than 3,000 million to invest in tertiary assets. In recent months, these international companies have taken the leading role in the purchase of land and residential development in Spain, looking for the returns offered by a market that is waking up.

In the last year these foreign funds have entered with force to the residential business. The soil is still cheap compared to the period before the crisis. In addition, there is confidence in the recovery. These funds are interested in buying land because they have to meet their high capital returns, of around 20%, and it is in the residential where they are now finding these returns.

These are safe investments for this foreign capital, because there is a lack of new housing after the break due to the brick crisis started in 2007.

Funds have become in recent months to buy land or reactivate housing, unlike other segments such as offices or shopping centers, where competition is greater. They have injected capital to companies stopped since the crisis and have relied on local knowledge of Spanish partners. It is essential to consider that there are sectors, such as tourism, which are always key to the Spanish economy. Others, such as finance or real estate, are once again gaining prominence and have been among the most active in 2016. By type of investment, foreign direct investment has greatly changed its sectoral composition. There’s a notable increase from 2012 investment in real estate, which in 2015 represented 12.9% of the total productive foreign investment, which has increased to 27.1% in March 2016.

Real estate investment in Spain will close the year marking a new high. In the absence of a month to finish the exercise, the data indicate that it will exceed 13.9 billion euros, 8% more than in 2015 and 45% more than in 2014. The SOCIMI’s have played the leading role, the main operations in Spain and represent 40% of the total investment. Although the national investor shows increasing enthusiasm (its weight has increased five percentage points compared to last year), so far more than 37% of the investment has come from abroad.

For foreign investment, we offer legal assistance regarding funds from other countries for investment in real estate and business. Our team has extensive international experience and cooperation agreements with international firms. We are also members of the Association of International Property Professionals (AIPP).This allows us to offer detailed advice in the field of internationalisation by providing services such as: International Trade Consulting, recruitment, formation of companies, subsidiaries and branches and Advice on tax issues

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The Government of the Balearic Islands has recently published the latest developments in reference to the tourism law in the Balearic Islands. The Balearic Government aims to guarantee the coexistence between tourists and residents in the islands and move towards a sustainable tourism model, which will give neighboring communities the appropriate instruments to solve any problems of coexistence.

The insular consells of Menorca, Ibiza and Formentera will decide the areas of these islands where the tourist rental of houses will be allowed, as in the case of the Consell de Mallorca. Meanwhile, the Palma City Council will establish on its own in which neighborhoods the city allows this type of rent. In the same way, it has been informed of the beginning of the processing of the preliminary bill that will regulate the tourist rental, in order to establish a real limit of tourist places, to order the tourist rental and to guarantee the access to the house.

Among the new exceptions are deleted in the exchange of places that had so far, everyone who wants to open a tourist establishment or commercialize tourist stays in a home must purchase the seats in the corresponding insular bag, provided there is available. In the case of multi-family housing, tourist places will be acquired for a term of 5 years renewable, provided the residential area in question is considered suitable for the marketing of tourist stays, according to the insular or municipal regulations. In addition, new commercialization of tourist stays in homes located on rustic land will be forbidden.

In all cases, housing must comply with a set of minimum legal, urban, sustainability and energy efficiency and tourism quality requirements. The web pages that sell tourist stays can only announce those houses that are legally registered. The Govern will reinforce the service of inspection of the rent and will raise the amount of the fines.

This context, in which there are very few new housing developments and tourist rental is triggering the quote of used floors. Both factors form a combination that explains that Balearics is the community in which the prices of the floors increase the last year, according to the data that yesterday made public the National Institute of Statistics (INE).

If you are thinking of rent a holiday villa to enjoy your vacation time or has a property in Mallorca and want to get a rental income don’t hesitate to contact us. Ripoll & Mateu Solicitors in Mallorca will advise and report you on the Law of Tourism and the situation of vacation homes in Balearic Islands.

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The purchase of a house for rent offers in Spain an average return of 5.3%. Acquiring a property to rent it is each year a little more profitable. Compared to 5.4% in 2016, profitability in 2015 was 5.2%, in 2014 5% and 4.8% in 2013.Mallorca, offers a return of 5.4%, being one of the most profitable municipalities to buy a house and put it on rent.

One of the engines of the reactivation that is taking place in the real estate market is the appetite of the medium and big investors, who buy housing in ours in search of the high yields offered by the rent. This market is very strong in Spain and in a context of low interest rates and the absence of such high returns in financial markets, which explains why it is a safe bet.

The demand for flats under lease already exceeds the offer in Spain. All forecasts indicate that 2016 will close with price increases above 10% on average in this segment, compared to the previous year. Real estate specialists agree that a new bubble has begun to form in this market after seven years of stagnation and falling prices.

The rent today is already present in more than 20% of the country’s residential park, and its upward trend will not slow down during 2017. Mallorca is one of the areas leading the increase in prices.

The large cities of the Spanish geography show considerable increases in the price of rents, mainly for a common factor: given the strong demand, supply is still insufficient and this makes prices higher. There is a double speed in this market. In the big cities shoot up, although in medium-sized municipalities and in the smaller ones the prices slow down.

In terms of sales figures, second-hand housing in the Balearic Islands reached an average price in October of 2,183 euros per square meter, representing an increase of 0.52 per cent per month and 6.47 per cent year-on-year, the country’s most intense promotions, according to the monthly sales price report. For its part, the Balearic capital, Palma de Mallorca, ranked tenth in the national ranking of monthly increases, rebounding 0.55 percent. From one year to the next, it was the Spanish capital that increased its prices the most, showing a rise of 8.81 percent. Thus, with 2,145 euros per square meter in October 2016, Palma de Mallorca was the eighth most expensive provincial capital.

If you intend to purchase a property in Majorca from a foreign country like England or Germany, you should consider that both the jurisdiction and the processes to be carried out and the roles of professionals involved in it are different. Throughout the whole process, the presence of a lawyer is essential to be responsible for providing obligatory advice to clients on legal, tax and legal liabilities acquired during the action of sale.

Ripoll&Mateu can fully assist you in the buying process.

 

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One of the curiosities of the real estate sector in the last years is being the increase of the demand of singular houses. Mallorca is one of the areas with the highest market for high-quality construction, presenting great prospects for the future.

This growth is being presented in Mallorca at a time of crisis in other sectors. Ibiza and Mallorca, show a very different behavior from the rest of Spain in this segment. What had traditionally been German and English demand, spent a few years on the Russian market and lately the Scandinavian market is entering with great force. Mallorca is a stable and safe area, with extraordinary connectivity with Europe through relatively short journeys.
In addition, it is a product that, although it can be developed in new soils, these last years is giving more and more in already built buildings undergoing integral reforms, and in extreme case to total demolitions to build a new house. Therefore, it is independent of the scarcity of land.

When an owner responsible as a house in Mallorca , is looking for a good team of professionals who accompany and advise in all aspects from the beginning to the end of the work. Professionals of architecture and construction who can shape and realize one idea, who can provide alternatives that improve the perspectives, analyze the technical, urban and economic feasibility of this idea.

Regardless of whether the new owner acquires a plot for building or an old property to reform, it is essential the figure of a lawyer who offers comprehensive service in everything required for the purchase of a property. It is therefore necessary to have the services of a firm of lawyers specialising in real estate law with multilingual abilities to offer totally reliable and understandable advice to the customer.

  • Advice and assistance will be given to obtain a Spanish ID no (called a NIE).
  • Negotiate, amend and finalise the terms and conditions of the purchase contract
  • Conduct a land registry search to ascertain the official owner, the description of the property; whether the building is registered and whether there are any charges attached to the property, such as a mortgage, easements or positive/negative covenants.
  • Search at the local council planning department to discover whether the building itself has a building license/permit.
  • Search at the cadastral registry to confirm the cadastral value.
  • Completion of the transaction before a Notary Public. A notary public is a Spanish Public Servant who certifies the capacity of the parties and the content of the title-deed.
  • After signing and the completion of the deal, Property Transfer Tax (ITP, currently a progressive tax from 8 to 10%) has to be paid to the Balearic Islands Tax Authorities within 30 days of completion, in accordance with a general tax rule.
  • Formally notify the utility companies (electricity, water, etc) of the change of ownership and organise payment arrangements with your Spanish bank.

We specialise in Real Estate Law and legal and tax advice in the process of buying and selling a property in Mallorca.

 

 

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As we have said on numerous occasions, acquiring a property in Mallorca is a very different process from other foreign countries and requires information and professional advice that facilitates the purchase while minimizing the risks.

Among other procedures, we strongly recommend carrying out construction surveys previous to the closing of the purchase sales process. These, come in a variety of forms according to the type of property that you are buying.

Reasons to perform building surveys previous to the buy of a property

  • The building survey will help you to have knowledge about the the property structural conditions.
  • This process allows youto be aware ofany problemsbefore buying ahome and know the location of boundary lines and other lines of occupancy or possession.
  • The survey will certify that the buildings and other improvements, alterations, and repairs to your property that exist at the time of the survey are not in violation of laws.
  • The survey will report your zoning jurisdiction and classification.
  • This knowledge will help you to begin a process of negotiation.

Main types of survey

  • Condition Report: This is the most basic survey you can get, it is designed to complement the mortgage valuation and just provides light indications as to the state of various parts of the property.
  • Home Buyers Report: this is suitable if you are going to buy a property that is in a reasonably good condition but generates some doubts. It will tell you any obvious major problems, and includes a valuation and an insurance reinstatement value. It also breaches of building regulations set by local councils of different localities of the island.
  • Buildings Surveys: This options is valuable if you are looking at a very old, unusual, listed, timber framed, or thatched property. It is also good to have a full building survey done if you want to do some serious building works and includes advice on repairs. It provides estimated timings and costs, and will tell you what will happen if you do not do the repairs.

If you are in the process of purchase a property in Mallorca , it’s advisable to appoint an independent surveyor working exclusively for you as a buyer. The cost and type of the survey depends on the size, condition and age of the property.

We have an in-depth knowledge of the General Urban Plan and the Spatial Plan of Mallorca, and have the best professionals in the field for the island to assist in construction matters and legalisation of constructions in Mallorca.

In Ripoll & Mateu we work to get total satisfaction of our customers effectively by offering legal services and personalized assistance. Real Estate Law, conveyancing, urban planning and foreign investments in Mallorca are our specialties.

 

 

 

 

 

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As specialists, we talked a lot about the process of buying and selling properties in Mallorca, but it is possible that sometimes an owner wants to sell a rented property.

The first thing to consider in this situation is that it is a completely legal operation, although we must consider a number of limitations depending on the regulatory regime to which the lease was clamped, depending on the date of signature. This determines the obligation of the purchaser to respect the new lease, depending on the regime to which they are subject:

LAU de 1964 (signed before January 1, 1995). In this case, the lessee has the right to continue occupying the property until the death.

LAU 1994 (signed between January 1, 1995 and June 5, 2013) Case in which the lessee is entitled to be in the house until it comply with the 5 years of the contract.

LAU 1994, following the reform introduced by Law 4/2013 (since June 6, 2013). The lessee is entitled to continue in the house until it comply with the 3 years of the contract when the lease is registered in the Land Registry or for three months if the lease is not registered. Regarding this last point, should be noted that once a renter occupies a rented flat, if the contract is not recorded in the Land Registry, the owner is entitled to put the property on sale.

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If the rental agreement is registered in the Land Registry, it will remain in effect even if the owner decides to sell the property. This is based on the Reform of the Urban Leases Act 2013, which came into effect as the measure to promote flexibility and development of rental housing market. In this case the tenant must not leave the building until the contract expires not although can be transfer the ownership of it to the new buyer.

In the case that a rental contract was not registered in the Land Registry, must check whether it is specified in the renunciation of preferential purchase. If this clause was signed, the owner can sell the property to the tenant communicating the eviction with 30 days in advance. If there is the case that the owner does not communicate the sale to the renter, this last can exercise the right to repurchase, purchase the property at the same price that is being sold to third, having 30 days to do it. One last case, if the contract is less than 3 years and is not being communicated the intent to sell before the end of the agreed period, this is automatically renewed up to three years, which prevents the sale to the owner until this deadline is exceeded not.

As a specialist in Real Estate Law in Mallorca, we offer comprehensive advice in the process of buying and selling property. The presence of a lawyer is essential to be responsible for providing obligatory advice to clients on legal, tax and legal liabilities acquired during the action of sale.  We’ll attend you with no obligation.

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The High Court of Justice of the Balearic Islands (TSJIB) has declared null a part of the decree of general principles and guidelines for coordination in tourism which was approved by the Government of the Balearic Islands in 2015 as it believes that invades own competencies of the Insular Councils.

The initiative part of the appeal presented by the Consell de Formentera against the decree that developed the Balearic Islands Law of Tourism, and the Court of the province has declared null its Section II.

Among the elements on which legislates the above mentioned title are the regulation of the the begin of a tourism activity, the inspection of activities in the sector, Intervention Plans in Tourist Areas (PIAT), the processing and effects of the statement of touristic interest and the processing of the sale of tourist places.

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To understand this sentence, we must take into account that the authority of the Government of the Balearics regarding Tourism covers the following aspects:

– Management and planning of the tourism sector.

– Management of promotion bureaux overseas

– Regulation and classification of tourism companies and establishments

– Regulation of public lines of support and promotion of tourism.

As for the Insular Councils, their regulatory authority is limited to the competencies of information, management and tourism promotion.

The Court says in the sentence that the government is not allowing the Insular Councils to regulate on matters of own powers, claiming that the regulation of various tourism issues including Title II of decree questioned by the Consell de Formentera «violates Articles 58.3 and 72.1 of the Statute of Autonomy of 2007, in conjunction with Article 70.3 and therefore incurs the defect of nullity «. It adds that the management, promotion and tourist information are «binding powers» of Insular Councils and, since 2007, «can no longer be understood that attach to the control of the Government».

If you are thinking of to enjoy your vacation time in a holiday rental home or has a property in Mallorca and want to get a rental, please contact us. Our specialist team will advise and report on the Law of Tourism and the situation of holiday rental homes in Balearic Islands.

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Spain has positioned as a leader in holiday rental for the foreign tourist who realize short time trips outside their countries. For countries like Portugal, France, Italy, Germany and UK, Spain is the leader destination in holiday rentals.

According to the latest survey published by the Instituto Nacional de Estadística (INE), the tourists who stayed in hotels during last July were responsible for the 62.4% of total expenditure, while spent 9.2% less foreigners who stayed in holiday rental homes. In the case of UK, Spain brings one of every three booking requests overseas, putting it as the top destination ahead of others such as France or Italy. These latter, Italians, have increased their demand in the Balearic Islands by 85%.  The request of British citizens to holiday rental villas and apartments in Spain has increased by 75% respect 2015; being Mallorca the destination that has strongly grow in this type of offer.

These data, confirms that the known as “urban bubble” has come to Mallorca in hands of the holiday rental homes. It’s therefore very necessary to apply a legal regulation to the right use of the holiday rental because actually, the Balearic Administration has an outdated autonomic normative  that establish that are exclude from the holiday rental flats, terraced houses and apartments in multi-family buildings and that have forbidden to advertise them in any type of  with the words touristic or similars.

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In the same way, its expected  that the investment in hotels reaches to 1.300 million euros in the last months of 2016, according to the forecast that shuffles the Hotelier Report of Spain, where it is expected to occur among 2016 and 2017 a total of 64 opening of hotels, mainly four- and three-star. Of all these opnenings, 18 will be in Barcelona and 15 in Balearics, because the profitability of the hotels in Spain is very attractive to investors. For 2017, the forecast is yhat will be international funds and private investors specialized in hotels whose will invest in the hotel market. It is expected that the hotel investment will continue rising and focusing on added value because investors ensure that the tourist spending will continue increasing.

The Ripoll & Mateu Solicitors Mallorca foreign investment area offers legal assistance with regard to funds from other countries for investments in real estate and commercial in the Balearic Islands.
Our team has extensive international experience, we also have cooperation agreements with international firms and are members of the AIPP (Association of International Property Professionals).

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After the real estate crisis, the outlook for the real estate market has changed considerably, and one of the changes that has emerged in this new economic reality has been the opening of real estate investment to the general public with independence of their economic capacity.

Acting under the funding system known as crowdfunding or collaborative economy, the technology for contacting investors is used. Through an intermediary online platform, people interested finance real estate projects and receive a return for their rent, the proportional benefit when sale, or both.

Platform managers select and propose investment in a number of real estate assets that are acquired by investors who wish to participate, through the establishment of a limited partnership created for this purpose. Then the properties are renovated to be put on rent and then sell them in the period in which revaluation be higher. Unitholders receive their proportionate share of income by way of dividends and their fair share of the capital gain when the property is sold.

investment-balearics

Legally, this activity relies on the very recent Law 5/2015 of Corporate Finance of April 2015, which in title V regulates the activity of participatory platforms funding. It´s a law that regulates the crowdfunding with financial component (the investors expects to receive remuneration for their participation) falls outside the scope of this standard crowdfunding instrumented through purchases, donations or loans without interest.

This is a law that:

  • Regulates platforms are active in the country.
  • Establish a reservation of activity in favor of platforms that accomplish the requirements of incorporation and exercise of activity established by law.
  • Projects that can be participatory funding may only be busines, training or consumption type projects.
  • Forbids the exercise reserved for investment services firms or credit institutions activities.
  • They need prior authorization to exercise their activity having to accomplish to obtain and hold it a number of requirements.
  • They must comply standards of conduct

Among many other things, this legislation provides that participants in such initiatives will be divided, according to their profile solvency between accredited and non-accredited. For the first there isn’t investment limit, but for the second (most individuals) is established a limit of 3,000 euros per project and 10,000 euros per year and per platform. Regarding the projects that can be financed, the limit is two million euros for unqualified investors, an amount that is elevated to five when they finance only qualified investors.

In Ripoll & Mateu Solicitors Mallorca we work to get total satisfaction of our customers effectively by offering legal services and personalized assistance. Foreign investment area offers legal assistance with regard to funds from other countries for investments in real estate and commercial Islands. Our team has extensive international experience, we also have cooperation agreements with international firms and are members of the AIPP (Association of International Property Professionals).

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The demand of luxury properties exceeds to the supply in the most exclusive areas in Spain mainly in Mallorca while the national real estate market attracts international investors with attractive prices and very competitive conditions.

The exclusive properties are sold in short time spaces for its excellent conditions such as valuations at market prices and excellent locations. The foreign buyers investment is considerably growing, the the analysis by source country shows that the British still represented the largest percentage of buyers. After the UK, the increased demand for luxury homes in Spain comes from France, the United States and Sweden.

Large international fortunes, with ability to purchase homes over half a million euros are active at the time of invest. The closing prices of luxury properties purchase operations are higher and timing of operations are being reduced between three and six months. This buyer’s profile, also known as “investors in lifestyle”, is not just focused in the potential appreciation of the property, they significantly value other aspects relating the quality of life of the country. Enjoy a good weather all year, a unique gastronomy offer such as sea views or frontline locations.

Mallorcan premium market is in a growth cycle. The most exclusive areas of the island (Andratx , Son Vida and Deià) remain being favorites between British, German and Scandinavian buyers. Building of new homes on the island practically came to a standstill since 2008, but in 2016 has experienced an increment of 55% in the number of requests for new residential projects compared to data recorded in the same period of 2015. This is the highest increment of the last ten years, in data of the Balearics Statistical Office (IBESTAT). The forecast for next year’s is of price growth between 3% and 5% and net sales will be almost half of what was sold in the maxima of the most successful years of real estate sales. In the same way, it’s confirmed as an attractive segment for investment.

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If you intend to purchase a property in Majorca from a foreign country like England or Germany, you should consider that both the jurisdiction and the processes to be carried out and the roles of professionals involved in it are different. Throughout the whole process, the presence of a lawyer is essential to be responsible for providing obligatory advice to clients on legal, tax and legal liabilities acquired during the action of sale.

At Ripoll & Mateu Solicitors Mallorca we advise, defend and represent our clients at all levels. Our greatest asset is an infrastructure of professional leaders in each field of action, especially Real Estate and Tax, as well as our international vocation and multilingual capacity.

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