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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