News about holiday rentals in Mallorca, what should you know?

By IbizaSol

A recent article published by the newspaper El Mundo makes a radiograph of the current situation of rental accommodation in Mallorca.

In the same, is exposed the boom in both tourist and urban leases carried out through large digital platforms that have established Mallorca as a strategic destination.
As part of this business boom, has exploded the underground economy in the holiday rental sector in the Balearic Islands, in the form of illegal tourist rental.Despite the fact that are being promoted as mere intermediaries between owners and renters behind them there is a spectacular business. Contrary to what happens with hosting companies regulated, in the case of digital platforms, it is unknown whether or not users pay taxes. In fact, in many cases, the same platforms recognize that on their own web pages may have hidden businesses that violate the Tourism Law of the Balearic Islands , which expressly prohibits offer this type of property for tourist channels, and avoid thus the payment of the tax.

The absence of a clear regulation has generated many doubts in Europe about how to monitor the management of these platforms, so that the Spanish government has authorized Autonomous Communities to control and punish them, if is applicable.

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Private individuals can perfectly rent their flats under the Law of Urban Leases (LAU) without registration in the register of Govern and thus avoiding paying the eco-tax, as this state law permits short leases, so that until not modify this law, there will be this kind of rent. In the Balearics is forbidden to rent flats for tourist use, although single-family homes, where tourist services won´t be offered or the property announced on tourist channels.

It isn´t a legal problem the fact that the owner of an apartment or villa that is not qualified as a tourist can rent it per season if the services are not offered. Similarly, advertising the same channels of tourism, which is forbidden by the Balearic legislation is not enough to determine that there is infringement, since according to the LAU would also be necessary that housing was subject to a specific regime. The infringement is in the fact that the owner rents its property as tourist when the property is not qualified in this way, thus avoiding the payment of the eco-tax, so that tourists staying in their properties do not pay tax.

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Avoid this problem is possible renting your holiday villa or apartment through a specialized and experienced company. With over 15 years of experience in the Mallorca Holiday Villas industry, Balearic Villas have the experts & the know-how to create the perfect, independent-living holiday for you. As a rental division of the real estate leaders of Balearic Properties, Balearic Villas specializes in holiday rentals of luxury villas and apartments in Mallorca, Ibiza and Menorca.

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Mallorca Property Market in 2016, the current situation in numbers

By IbizaSol

Below we offer you the latest information relating to the situation of the property market in Mallorca when only missing four months to finish the year.

  • Balearic Islands is the most powerful area of the Spanish real estate market, as both Mallorca and Ibiza and Formentera are in a clear recovery process.
  • During the first quarter of this year were sold in Balears 3,066 homes, 541 more than during the same period last year, representing an increase of 21.4%. Of these, 2,361 were used and 705 new.
  • In March were sold 972 homes in the islands, 24.5% more than in the same month of 2015amply surpassing average increase of the country, 16.8%. During the month of June, home sales increased 19.4% over the same month of 2015.
  • The acquisition of private housing by foreigners continues to rise. International investors, show high confidence in the property market on the island.
  • Mallorca has become the main destination of Swedes when buying a home in recent years, because since 2013 this trend have enjoyed spectacular growth at around 80%. They have become the third nationality at the time of acquiring housing, after British and German.
  • The type of media operation is around 350,000 euros in the Bay of Palma, although in Deia, Valldemossa and in the rest of Mallorca investment far exceeds 800,000 euros.
  • In Spain, the finished housing prices has moderated in July with an increase of 0.3% over the same month of 2015, compared to 1.5% June. In the case of the Balearic Islands, the finished housing (new and used) has experienced a rise of 1.7% in July, according to the appraisal firm Tinsa.
  • In the Balearic Islands have registered in June the highest rates of annual variation of sale of estates (20.2%), according to data from the National Statistics Institute (INE).
  • According to the record of the sale of registered homes, Balearics is the community with the highest number of transmissions (136) per 100,000 inhabitants.
  • The price per square meter of housing in the Balearic Islands stood in the first quarter at 2,122 euros, the second most expensive of all communities after País Vasco, which stood at 2,190 euros, according to the General Council of Notaries.
  • The markets of the rental and resale property in the Balearic Islands are experiencing a boom evident reflecting increased demand experienced in recent times.
  • Balearic Islands is experiencing strong upward pressure by foreign demand, especially in high-end and luxury sector, which has led to an increase in
  • Calvia, is one of the most expensive areas of Spain, at a rate of 2,835 euros per square meter, and and is encouraged at a rate of 11.4% interannual and could regain its highest price in just over a year.

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As a specialist in Real Estate Law in Mallorca, we offer comprehensive advice in the process of buying and selling property. If you intend to purchase a property in Mallorca 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. 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. No doubt to contact us, we will attend you with no obligation.

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Investing in the property market in Mallorca,this is a perfect time

By AdmSolJM16

Balearics is one of the places in Spain with more interest in permanent homes, vacation rentals and other. The current moment is perfect to investing in a property in the islands since the constant revaluation is maintained for months and also has better facilities for mortgage loans; an excellent combination to generate good prospects in the sector.

Based on data from the INE (National Statistics Institute), Balearics is the community in which   more grown the interannual housing prices, at 4%.
Real estate activity has picked up significantly by the good performance of the economy in the islands, especially the last two tourist seasons, which has generated greatest richness and economic dynamism. Banks have increased granting credits for the purchase of properties, in this regard has also increased the number of companies and individuals who now see in properties a warranty investment.

Acquire housing for rent represent a gross annual return of 5%, a higher percentage than banks offer deposits and more at a time of rising prices. International investment in real estate product has grown exponentially in recent years. Of the approximately 1,100 million direct investment received in 2012 it went to 1,892 million the following year in 2014 rose to 3,010 million euros in the year. The past fiscal year, the figure increased to 3,012.5 million euros and a further increase is expected for this year.

The increase of international interest aroused by the Spanish real estate activity has, likewise, much to do with price stabilization that it has stopped falling across the board.

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Similarly, one of the major revolutions that has lived the Spanish real estate sector in recent years is the consolidation of the SOCIMI (listed companies investment in the property market), an investment linked to the rental market, which has been gaining projection in Spain. Retail customers also have the opportunity to enter the real estate sector through specialized investment funds. Most of these funds takes stakes REIT (investment vehicles in the real estate sector) carrying consolidated decades in countries like the UK, Holland and France, and are dedicated to buy buildings, offices or malls, put them in rent and distribute dividends to its shareholders.

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).

Our clients know to turn to us with any legal matter, and that if the particular issue is beyond the scope of our practice areas, we will assist them in finding the professional assistance that is required.

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The Brexit and its consequences for Mallorcan property market

By IbizaSol

Much has been said in the last weeks of the consequences of Brexit for the property market in Mallorca and Spain. Since the referendum held last June, the pound has dropped more than 10% in value. Because of this, several investment funds in the Balearic property sector suspended trading before the rain redemption orders.

So, the situation doesn’t seem beneficial for the real estate sector in England, however, this situation has a positive impact in the short to medium term real estate in Spain.
The impact of Brexit has meant the loss of value of sterling by about 10% against the euro. This implies a loss of purchasing power for buyers; despite this, the Balearic Islands are one of the main destinations for British investment. The current situation is beneficial for them and are interested in investing for reasons of proximity, connections, climate and quality of life.

Real estate sales have increased by 79% in the first half of the year. The price has increased in some cases up to 59% and in some areas of the island is taking the case that the supply is unable to meet demand. The real estate market has emerged mainly in the investment side and in relation to British investors are expected to increase their investments in our country, as high interest remains in the residential. The Spanish property market offers great opportunities and high returns for the British and the Balearic Islands are presented as an attractive investment in the medium and long term.

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After all the foregoing arises a positive impact of the Brexit on the Spanish real estate market, in fact many non-EU buyers have already begun to look for alternative places to London that offer good investment potential. The number of British citizens seeking to move abroad has increased by 30% and Mallorca is at the top of their searches.

Buying a property in a foreign country can be a complicated affair and fraught with formalities and obligations that the purchaser might be completely unaware of until it is possibly too late. Ripoll Mateu Solicitors Mallorca understand that the process of buying a property in Spain differs from that in the UK. We can advise you on all matters relating to the purchase of your property, for foreign investment, we offer legal assistance regarding funds from other countries for investment in real estate and business.

We specialise in Real Estate Law and legal and tax advice in the process of buying and selling a property in Mallorca, contact us for your request.

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Conditions to donate or inherit a property in Spain and Balearics

By AdmSolJM16

This is a question that many people ask, how to pass a property before death and the donation is usually an option to consider. While it should be noted that in Spain the number of inherited housing is much greater than donations, according to the National Statistics Institute. The main factor that tips the balance is the fiscal cost, which is different in each region.

Taxation is another important point to consider. In some regions (with jurisdiction over the inheritance and gift tax) gifts tend to be more burdensome for the purposes of inheritance taxation. These include bonuses, rebates and regional tax credits. In contrast, the donation are only some of these tax advantages. The beneficiary of the donation is who will have to pay, as in the case of inheritance, although with harder conditions. In addition, the donor must pay the income tax for the donation, since it is considered a lucrative transmission that can produce capital gains or losses.

In the case of acquisition of residence by inheritance, state law provides for a 95% reduction in the tax base on which the tax is calculated, up to a maximum amount of 122,606 euros. The Autonomous Communities may, in turn, increase this percentage, modify the limit and apply bonuses to the fee payable out. In the case of donations of residence, state law does not provide specific reductions, each region sets its rules. Are applied reductions in the tax base when it comes to regular housing or money is donated to the sons to buy their first home.

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Each region has its own rules regarding inheritance and gift although in general, donations are “more burdensome for the purposes of taxation” that inheritances. The fact that donations prove generally more expensive than inheritances is that many regions do not include any bonus for this legal form, or submit its application only to certain situations and to certain amounts. In the case of the Balearic Islands, there is a reduction of 100% of the value of inherited property, with the limit of 180,000 euros per taxpayer. In the case of a donated house there is also reduction for children under 36 years old and with less equity to 400,000 euros: the reduction is 57% of the property value provided it does not exceed 180,000 euros and doesn’t have an area of over 120 m2.

Contact us if you need advice about this issue, our team offers judicial and extrajudicial representation and advice on matters relating to movable and/or immovable property, as well as specific areas of civil law as real estate law, family and inheritance law.

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More about inheritance taxes in Mallorca

By IbizaSol

Recently  has made public a statement according to which a court agrees to indemnify a taxpayer overpaid, as non-resident, in an inheritance as prescribed which leads us to recall previous articles that have talked about the existing discriminatory effect based on the different tax treatment in the various regions against which the European Court ruled in its judgment of 09.23.2014.

This considered that Spain had failed to its obligations under Articles 21 TFEU and 63 TFEU and Articles 28 and 40 of the Agreement on the European Economic Area of 2 May 1992 to introduce differences in the tax treatment dispensed donations and successions, between the beneficiaries and donees resident in Spain and non-residents; among causative residents in Spain and non-residents, and between donations and similar provisions of immovable property situated within and outside Spain.

In the case mentioned, the affected overpaid based on the application of the already known discriminatory rule.

Taxpayers must know their right to claim additional amounts paid as well as passes to be followed in the case of the time period for claiming be prescribed.

This recent judgment of 05.26.2016 recognizes the compensation of taxpayers overpaid and the return of that amount the taxpayer’s right being prescribed to consider a discriminatory double standard applied based on the judgment of the European Court, being obvious the damage and its quantification, which coincides with the amount paid in error.

To determine the validity of the routes chosen by taxpayers to exercise their claims, are remembered the judgments in which werw two channels to make them effective, on execution were set on record, the return of the “health cent” who could prove their improper fertilizer, based on the ECJ judgment. The first would be the return of improper income, and the second issue being whether the limitation period of this return would begin to run with manure or with the sentence, would in any case, the equity claim. If one considers, in some cases, that it has been an abnormal functioning of public services, resulting from the application of a law expressly expelled as contrary to Community law, its quantification would coincide with the amount unduly paid, pleading not consistent with the law the resolution of the tax authorities which confirmed the tax assessment.

If you need more information or advice about taxes, please contact Ripoll & Mateu Solicitors Mallorca. We are at your disposal through our website  or at our offices in Palma and Pollença.

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Housing sales makes grow foreign investment in Balearics

By AdmSolJM16

The sale of luxury homes has skyrocketed foreign investment in the Balearic Islands in general and particularly in Mallorca during the first half of the year. Recent studies show data 56.6% of the investment, according to the Ministry of Economy, reaching a total of 61.9 million euros capitalize.

From the Association of Real Estate Developers of Balears (Proinba), it states that currently the type of property being sold at a good pace are single-family luxury homes, with average prices ranging from 350,000 to several million euros . As we have mentioned in previous posts on real estate market, this is a market that postulates the rise and continue to do so throughout this exercise. Swedish, French, German, Swiss and British operations are capitalizing on sale in Mallorca, Menorca and Ibiza. Balearics leads the transactions of such properties to foreign citizens, above any other autonomous community. And it does since 2009, throughout the recession, which gives an idea of the appeal of the Balearic Islands still treasuring for investors from outside our borders. The increase in transaction confirms the good health of the housing market and shows that after the crisis the sector has returned to normal, although the numbers are still far from those achieved in the hardest years of the property bubble. Furthermore, the particular demand has not been influenced by political uncertainty and it seems that we have a demand pull, which is clearly reflected in price increases.

Similarly, from the Chamber of Commerce of Mallorca assert that the real estate sector is which is attracting foreign investment, as well as the hotelier. Tour operators buy establishments to make beds for the next three years in Mallorca and other islands. To this must be added that increasing air connectivity with Nordic countries and Central Europe has encouraged this increase in real estate transactions in the past two years.

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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).

The Ripoll & Mateu Solicitors Mallorca team is committed to providing the best work processes to provide our customers with the best results, in a constant quest for professional excellence. We establish external collaboration when circumstances require and are firmly committed to transparency and honesty in our actions.

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By IbizaSol

Recent studies claim that during the first quarter of 2016, real estate investment amounted to 2,100 million euros, which is the second best start of the year since the beginning of the crisis in 2008. These data show that investment in  real estate market through mutual funds is a very valid option to investors at all levels, either directly acquiring a property, acquiring debt on real estate assets or through investment funds they invest in such assets. The first of the above options allows investors to enjoy active, the rest of modalities simply give the possibility to enjoy its profitability, but adding an important advantage: liquidity. This form of investing, you can enjoy the profitability of long-term assets, profitability always comparable to that of global equities. In the last 15 years, this type of investment has provided superior to that of any other asset class, namely 10.7% annually.

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When carrying out this type of investment must take into account such factors as:

– In short periods of time, its correlation with the rest of the equity is high, but in the long term the asset is highly correlated with the evolution of real estate prices. Thus, although in the short term we should assume the volatility of equities in the long term, profitability will be marked by the total property.

– Investment in real estate provides an extra return without increasing risk. It is therefore advisable to have between 15% and 20% of the assets invested in this asset class.

– When analyzing the return on investment in REITs or listed property against any other type of investment should be used as regards total return on investment as the dividend yield on this asset class is higher than the equities in general. Keep in mind that dividend growth and inflation offset difference.

– As for the idea regards injury on investment because of rising interest rates we can say that if these increases are accompanied by an improvement in the economy and inflation demand, rising incomes neutralizes the impact of higher discount rates.

The above data confirm that investment in real estate can be considered as a good alternative for investors who want to get an interesting long-term profitability and diversify its assets.

At Ripoll & Mateu Solicitors Mallorca we work to get total satisfaction of our customers effectively by offering legal services and personalized assistance in foreign investment area 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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Some recent data on housing prices

By AdmSolJM16

Balearics is the Spanish community in which has more increased the price of housing compared to 2015, an increase of almost 10% when the rest of communities the increase does not reach 2.5%. In the whole of Spain, the average price of private housing increased by 2.4% in the first quarter to stand at 1492.4 euros per square meter, stringing four consecutive quarters with annual growth, as reflected in the statistics recently published by the Ministry of Public Works.

The price of private housing has also increased by 0.2% per square meter in reference to the last quarter of 2015. Since the minimum value reached in the third quarter of 2014 the price of housing has rebounded 2.5%. This new increase comes after the average price of private housing to go up 2.1% last year. It has experienced in the first quarter year on year growth of 3.1% after adding six consecutive quarters of increases.   In the classification by autonomous communities that present year growth of price, are the Balearic Islands (9.6%); Catalonia (4.9%); Madrid (4,2%); Extremadura (3.7%); Galicia (2.6%); Valencia (2.4%) and Canarias (2.4%). Free housing for up to five years old has increased in the first quarter by 0.2% to 1,727.8 euros, while those of more than five years have grown 1486.4 euros per square meter, representing a rise 2.6% annual rate. On the other hand, the average price of subsidized housing registered an increase of 1.5% to 1,113.2 euros / m2. The number of property valuations used for the calculation of housing prices in the first quarter of 2016 was 110,133, representing a 13.9% increase over the same quarter last year.

If you intend to purchase a property in Majorca from a foreign country, Ripoll & Mateu Solicitors Mallorca can fully assist you in the buying process. We offer our clients a comprehensive service in everything required for the purchase of a property. Feel free to contact us, 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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Some recent data on housing prices

By IbizaSol

Balearics is the Spanish community in which has more increased the price of housing compared to 2015, an increase of almost 10% when the rest of communities the increase does not reach 2.5%. In the whole of Spain, the average price of private housing increased by 2.4% in the first quarter to stand at 1492.4 euros per square meter, stringing four consecutive quarters with annual growth, as reflected in the statistics recently published by the Ministry of Public Works.

The price of private housing has also increased by 0.2% per square meter in reference to the last quarter of 2015. Since the minimum value reached in the third quarter of 2014 the price of housing has rebounded 2.5%. This new increase comes after the average price of private housing to go up 2.1% last year. It has experienced in the first quarter year on year growth of 3.1% after adding six consecutive quarters of increases.   In the classification by autonomous communities that present year growth of price, are the Balearic Islands (9.6%); Catalonia (4.9%); Madrid (4,2%); Extremadura (3.7%); Galicia (2.6%); Valencia (2.4%) and Canarias (2.4%). Free housing for up to five years old has increased in the first quarter by 0.2% to 1,727.8 euros, while those of more than five years have grown 1486.4 euros per square meter, representing a rise 2.6% annual rate. On the other hand, the average price of subsidized housing registered an increase of 1.5% to 1,113.2 euros / m2. The number of property valuations used for the calculation of housing prices in the first quarter of 2016 was 110,133, representing a 13.9% increase over the same quarter last year.

If you intend to purchase a property in Majorca from a foreign country, Ripoll & Mateu Solicitors Mallorca can fully assist you in the buying process. We offer our clients a comprehensive service in everything required for the purchase of a property. Feel free to contact us, 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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