Balearic Islands is currently at the forefront of real estate market price leadership with a 7.2% increase between January and June, compared to the same period last year, according to data from the appraiser Tinsa.

The islands have benefited from the incipient recovery of national tourism but, above all, from the strong increase in the number of foreign visitors who, if maintained at the current pace, could reach 84.3 million visitors in the year, an 11,6% more than in 2016. This fact has encouraged the purchase of the rent, but also as a property of own use by many tourists.

We must emphasize that the evolution of housing prices in the Balearic Islands over the last decade has been much more favorable than the whole Spanish geography, because of its small volume of stock, which also would support the safety of properties in these areas as an investment.
It is a fact that foreign citizens are buying more houses than ever in the Balearic Islands. Last year reached a record high, with more than 53,000 sales, despite the decline of British buyers, French and German. The arrival of Swedish citizens has changed the landscape of buying and selling properties in Mallorca, climbing to the fourth position of home purchases by foreigners.

mallorca-solicitors-5

To date, Balearic Islands, operate fifteen Swedish real estate. The Nordics offer a personal shopper service: they explain how they want the home and the professionals are looking for it in the real estate market available. 72% of contacts established with Swedish results in a purchase.

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).

If you intend to purchase a property in Mallorca from a foreign country 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.

0

Data from recent statistics cast the following conclusions: The average price of second-hand housing in the Balearic Islands has increased by 1.2% in May compared to the previous month, bringing the value to 2,108 Euros per square meter.

  • This figure is 25.5% above the average in Spain.
  • Balearics are the fourth most expensive autonomous region in Spain, only behind the Basque Country, Madrid and Catalonia.
  • The price of new housing in the Balearic Islands has risen 3.1 percent in the first quarter compared to the same period of the previous year.

Balearic Islands are in the spotlight of foreign investors looking to buy a property in the Islands. Last year, the volume of transactions by international buyers exceeded 1,600 million, which implies a 50% increase over the last two years. Luxury properties are the most sought after by European buyers, more interested in buying rather than renting, which has caused a significant increase of the average price so far this year in different areas of Mallorca.

Citizens of Scandinavian origin are playing a very active role in this situation. They have focused on Mallorca to acquire a holiday home, which reaffirms the trend detected by the registrars during the last months of 2016.

foto-banner2

Mallorca is popular among the Swedes, and the question is, why? Their fascination for the island is relatively recent and is based on various aspects: the weather, the strength of the Swedish currency (1 euro is equivalent to 9.6 crowns) and the shortage on the real estate industry in this Scandinavian country, which makes it almost impossible for its citizens to acquire a house. Factors that together have caused overwhelming buying and selling. Among the top areas in which the Scandinavians are acquiring properties, highlight goes to Palma center, the old town and various municipalities of Serra de Tramuntana.

Furthermore, there is a neighbourhood in the centre of Palma targeted by every Swedish who wants to invest in Mallorca: Santa Catalina, known as “little Sweden”.

If you are interested in buying a property in Mallorca please do not hesitate to contact Ripoll&Mateu Solicitors Mallorca.

We’re specialists in Real Estate Law in Mallorca and we offer comprehensive advice on the process of buying and selling property.

0

Last April, the Balearic Islands Tourism Agency Board initiated the Inspection Plan for the accommodation offer focusing its efforts on controlling advertising and illegal commercial offer of holiday rentals in private housing.

With this, the offers published on the Internet are specifically controlled by verifying data that points to an activity outside of the tourism regulations. In addition, the Balearic Islands Government announced joint actions with other public administration offices, such as the national and regional Tax Agencies.

As a result, the first holiday rental inspection campaign in the Balearic Islands produced sanctioning actions to eight real estate companies with fines for commercially offering illegal holiday rentals.

The current tourism law prohibits the sale of touristic stays in dwellings located in residential buildings and at the same time it modifies the rental regulation considering the possibility of offering touristic stays in residential buildings, if a series of requirements are met and whenever it is done in the authorised areas.

And the fact is that the Balearic Islands are beating all records of visits recorded to date. Hospitality companies and holiday rentals search engines reflect a 90% occupancy until October. The same happens with licensed holiday rentals, where the average price for overnight stays doesn’t go lower than 800 euros.

palma-old-town

To deal with the above, in July a new law will change the holiday rentals to tourists in the islands and it will contemplate the following stages:

  • The properties that are already registered with the Tourism Agency may continue to be rented as before, complying with the same rules and maintaining the same sanctioning regime.
  • The apartments located in residential buildings will still not be able to be rented to tourists or commercially offered through touristic channels.
  • The apartments located in residential buildings whose owners want to rent legally should wait for the zoning and also meet the requirements set by the new law.
  • Villas or semi-detached villas can be rented to tourists, if meeting minimum requirements and if obtaining an authorisation from the Tourist Agency in advance. With the new law, the owner must present a document from his city council that proves that his property is located in an area authorised for holiday This process is the same that must be done for apartments located in residential buildings.

Faced with this type of situation, we recommend that you always search for the help of legal experts on holiday rental and completely legal local companies so that you can make use of your villa or holiday rental apartment with total peace of mind and confidence.

0

The High Court considers that the capital gain tax is unconstitutional in these cases, very common since the outbreak of the economic crisis. We must consider that the tax is not annulled but its automatic application in cases where there’s no revaluation of the property.

Last February, the Constitutional Court (TC) has already the unconstitutionality of the capital gain tax on the increase in value of the Urban Nature Land (IIVTNU) of Gipuzkoa, when in the transmission of a property would have been sold at a loss. With the new sentence, the Constitutional extends this doctrine to the whole national territory. According to the judgment of the Constitutional Court, the seller of a property can’t be required to pay a tax that levies an increase in value which, in fact, has not occurred.
The TC values that the constitutional principle of economic capacity is violated since the tax is not linked to the existence of a real increase in the value of the property, but simply to ownership of the land over a period of time. For all this, the Court declares the unconstitutionality and nullity of arts. 107.1, 107.2 (a) and 110.4 of the challenged law. All those taxpayers who sell a house and obtain a profit from the transaction, must continue to pay it.

tourism-law-mallorca

In view of the foregoing, it’s estimated that the number of properties on which the repayment of the surplus value could be reclaimed because it was transmitted for a value lower than that of acquisition would be around 550,000 properties. Any natural or legal persons who have paid the tax by virtue of the transfer of a property to losses in a non-prescribed fiscal year can claim the payment of a non-corresponding capital gain.

What is needed to claim?

1.- Appeal to the council, although it may subsequently be necessary to resort to the courts.

2.- A technical report performed by an independent expert, which proves the loss of value produced between the moment of purchase and that of the sale. A specific technical report is required on the property transmitted, which shows the variation of the market value of the land between the moment of acquisition of the property and the transmission.

3.- The deeds of purchase and sale of the last and penultimate transmission of a property.

4.- Statistics of average prices of the residential market of the municipality or the postal code where the asset is located.

Contact us if you are faced with the need to claim a capital gain overpaid or have questions about the status of your property.

0

Few weeks after the start of the summer season, the Balearic Islands Government, entities and companies continue to laps with the Holiday Rental Law.

Earlier this month, the bill that will regulate holiday rentals in the Balearic Islands was approved by the Government Council after incorporating 200 of the 294 allegations it received in the public information period to which it was submitted.
These days, fourteen entities have adhered to the manifesto “Quality tourism for all”.
This manifesto has been promoted by the Association of Holiday Rental Apartments and Homes of the Balearic Islands (APTUR) in defense of the holiday rental, with the aim of obtaining the highest number of accessions and demonstrating social support towards holiday rentals.

The entities that have signed the document are: PIMEM, PIMECO, AFEDECO, ACOTUR,  municipal markets of Santa Catalina, Pere Garau, El Olivar and Inca, AMAT (Mallorcan Association of Tourist Attractions), ABONE (Balearic Association of Nightlife and Entertainment), Municipal Taxi Automotive Association (AMTAT), the Association of Golf Courses of the Balearic Islands, the Business Association of Rental of Vehicles and the Association of Nautical Companies of the Balearic Islands (AENIB).

The signatories argue that holiday rental is an aid to the local development of areas that could not have had the opportunity to access the income generated by tourism with the offer of traditional accommodation. APTUR-Balears states that vacation rental is a complementary accommodation model where the end user decides based on privacy and flexibility arguments. It also stresses that it is transverse from the point of view of sharing the benefits of tourism between the complementary offer and helps reduce the seasonality.

The entities affirm that they are looking for a regulation of the appropriate sector in which everyone can develop this activity with guarantees and fulfilling their fiscal responsibilities.

0

Few weeks to the beginning of the tourist season and continuing with the follow-up we made to the situation of the Balearics Law of Tourism, has just confirmed that most of the homes for vacation rentals in Palma don’t meet the requirements set in that law.

This statement is based on data as evident as the fact that while the Ministry of Tourism registers 302 homes of this type, in the capital of Mallorca more than 6,000 tourist homes are rented through the internet.

Recall that the Tourism Law prohibits tourist rental in multi-family buildings.

This circumstance that is not fulfilled in the majority of dwellings, according to the abysmal difference in these registry data. The Balearic Government is studying the implementation of a new standard, which allows rental activity in multi-family housing, with the approval of the neighbors. A decision that has many detractors. From the association of tourist apartments Aptur they argue that this measure is not viable and that the houses in these circumstances are in a lawless situation, since the Law of Urban Leases contemplates to offer tourist services “in any type of house” by a “short period of time”.

palma-old-town

Another novelty that has recently been known is that the towns of Mallorca’s interior will not limit tourist rental and therefore are exempt from distinction between tourist and residential areas, a requirement included in the draft of the Holiday Rental Law.

With this measure, the Government of the Balearic Islands aims to benefit small towns that have empty houses and where the problem of access to a home is non-existent. Thus, the economic activity of these nuclei won’t be restricted. This measure will not give freedom to the tourist rent, since the law sets some requirements when renting, such as accessibility, energy consumption and not having previous penalties in urban planning.

townhouse-pollensa

From Ripoll Mateu Solicitors Mallorca we recommend hiring your holiday home in Mallorca through companies in the sector that are solvent and offer guarantees. Balearic Villas  in Pollença, with over 15 years of experience in the Mallorca holiday villas industry,  have the experts & the know-how to create the perfect, independent-living holiday for you.

 

0

Recent data from the Balearic Government confirm that the economy of the islands grew by 4.1% in 2016, the highest growth in the last 16 years. There were increases in all quarters, highlighting the good behavior in tourism in seasons in which traditionally presents less activity.

In the same report, the Government believes that the ‘Brexit’ will have little impact on the Balearic Islands during this year, following the same line of what happened in 2016 since the process is still in a negotiating moment.

It’s expected that the Mallorcan economy will not be unduly prejudiced in the short term by the UK decision to leave the European Union, despite receiving more than three million British tourists a year and has a population of almost 20 000 residents.

The Balearic economy is in a bullish process

Balearics is experiencing exceptional tourist seasons thanks to the quality of its services and the collateral consequences of the difficult situation being experienced by other countries that in the past were direct competitors in this sector.

Following in the line of these data, it’s to emphasize that in January Balearics received a total of 107,087 foreign tourists. A figure that translates to the arrival of almost 5% more tourists than in January 2016. According to INE data, Germany remains the main emitting country of the Islands, with 46.4% of tourists; Followed by the United Kingdom, which sent to the Balearic Islands 10.4% of visitors.

floor clause-mallorca

The Balearic Islands will continue to grow in 2017, with a forecast of 3.6% after two years of growth. The Government expects that 2017 will also be one of the highest values recorded in the last 16 years, close to the results of 2016, and will represent an accumulation of growth of 11% in the last three years.

The forecast for 2017 places the Balearic Islands in a process of “normalization” of the growth cycle.

Growth is expected between 3.2% and 3.7% in all Islands. By sectors, the gross value added shows positive increases in all activities: the service sector is the one that grows the most, 3.8%.

Another significant finding is that the number of home mortgages increased by 14% in 2016 over the previous year, to 281,328, thus earning its third consecutive annual increase after seven years of declines.

With these very positive conditions, we can consider that it is a good time to invest in the Balearics, especially in Mallorca.

0

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.

 

1

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.

 

 

1

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.

 

 

 

 

 

0