Costs and taxes for buying and selling property in Mallorca
Are you going to sell or buy a property?
This is what you’re supposed to pay
Buying and selling a property is not an easy task. There are many factors you need to keep in mind to avoid getting scared, or worse… getting a fine.
All that paperwork, formalities, obligations… your head is about to explode at the thought of it.
But now you can breathe, because you are lucky that in VivoMallorca we have been ahead of the game and we have prepared a list of all the charges you must assume, both to sell your house and to buy your next home.
So, first of all, relax; we do much more than just making your house look pretty 😉
And second, grab a pen and paper, because today we are going to teach you how to have everything under control.
INDEX:
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HOW MUCH DOES IT COST TO SELL A PROPERTY IN MALLORCA?
THE COSTS YOU BEAR WHEN SELLING A PROPERTY
Arras Contract or Purchase Option
THE TAXES YOU TAKE ON SELLING A PROPERTY
Municipal Capital Gains and Tax (IRPF)
HOW MUCH DOES IT COST TO BUY A PROPERTY IN MALLORCA?
THE COSTS YOU BEAR WHEN BUYING A HOME
THE TAXES YOU TAKE WHEN YOU BUY A HOUSE
HOW MUCH DOES IT COST TO SELL A PROPERTY IN MALLORCA?
Selling a property involves costs, fees and taxes ranging between 10% and 15% of the price of your sale. These are mandatory and in part depend on the situation of your home.
We know that the last thing you want is surprises.
So, to make sure that the monster of doubt does not chase you, we will explain each concept adapted to Mallorca and the approximate cost of each procedure. In addition, we will clarify which expenses are due to you and which are borne by your buyer.
THE COSTS YOU BEAR WHEN SELLING A PROPERTY
Certificate of occupancy:
What is it?
It is a document that proves that your house meets the minimum conditions to be inhabited, such as: ventilation, dimensions, distribution, lighting, etc.
It is necessary to contract services such as electricity, water and gas. As well as to process a mortgage, although in this aspect there are exceptions ;).
How is it managed?
First an inspection is done.
Depending on your case, there are 4 types:
Of First Occupation, of Second Occupation, of First Occupation of Rehabilitation or by Lack.
The deadline to get it is about 1 month. And you process it through the Consell of Mallorca.
Approximate cost
It varies according to the type of card, inspection and fees.
Usually it will be around 100 € – 250 €
Energetic Certificate:
What is it?
It is an indicator of electricity consumption that influences the bills of supplies.
It is calculated with your home in normal conditions, and reflects the average energy expenditure.
It aims to reduce energy impact and CO2 emissions.
How is it managed?
First you hire a technician to do the inspection to calculate the energy efficiency (if you don’t have it already).
Once registered with the Directorate-General for Energy and Climate Change, you receive the qualifying label (A,B,C,D,E,F, or G), which you must include in the sales contract.
It is valid for 10 years. It is mandatory to have it and its infringement can lead to a fine of up to 6,000 €.
Approximate cost
Depends on the certifier.
Around 100 – 200 € (+VAT).
Registration note:
What is it?
It is the legal registration of your property, to know who
is the owner and what are the rights and charges that correspond to that property.
This document is informative. And it is not mandatory, but you should.
How is it managed?
You can manage it online, through the website of the
Colegio de Registradores. Or in person at the Property Registry.
To request it you need the registration data of the property:
Unique Registration Code, Ownership and Location.
Approximate cost
The official cost is 9.02 € (+VAT).
We include it in our fees
Mortgage Cancelation:
What is it?
It is the deed of cancellation of a mortgage loan that you have to do before a notary, to then register it in the registry.
You have to assume that in case you sell a mortgage-backed taped property.
To which are added the burdens of the Registration of Cancellation in the Registry
How is it managed?
Through your own management or through the bank of whoever your buyer is, in case you have applied for a mortgage to purchase your home.
This process is managed at the time of the sale and purchase signature. The expenditure corresponds to you, but the management is the management of your buyer.
Approximate Cost
It ranges from €400 to €1,000.
Depending on how you do it and with whom. Either through a manager or on your own.
The final price depends on the notary and the Registry
Arras contract or Purchase option:
What is it?
It is a contract that commits and obliges the fulfillment of conditions, deadlines and consequences.
Protects the two parts
(buyer-seller) in the event of mishaps or regrets and the sale is not made.
How is it managed?
You can manage it on your own, or with a lawyer, or with a trust agency like VivoMallorca.
Subject to the conditions set out in the
Prisons and the Penitentiary.
This document must include what was agreed during the negotiation: the price, the reserve sign, the deadline to sign, the costs of the operation and the penalties
Approximate Cost
Depending on who you deal with.
We included it in our fee.
With a lawyer it can cost around 100 €.
Real State fees:
What is it?
It refers to what your agents charge for managing the sale of your property.
This considers the promotion and marketing actions, as well as the Legal and Verification of the property, among other administrative
How is it managed?
You should know that there are some formalities that must be requested in the Public Property Registry and have a fee charge.
For example: the Certificate of No Urban
Approximate Cost
It depends on which real estate agency you choose to help you sell your home.
It usually goes between 5% and 6% of the value of the property.
Contact us without fear, here we are to resolve
Notary:
What is it?
Son los gastos que se producen cuando se otorga la Escritura Pública de la Compraventa.
How is it managed?
Como vendedor, te corresponde tanto la elección de la Notaría como los gastos de la escritura de compraventa.
Approximate Cost
Al importe fijado por normativa se le llama Aranceles
Notariales. Oscila entre los 600 € – 1.000 €.
Varía según el precio de la propiedad, extensión de la
escritura, número de copias y extras (ejemplo, un trastero o
garaje anexo).
THE TAXES YOU TAKE ON SELLING A PROPERTY
Municipal and Treasury (IRPF) Capital Gains:
What is it?
It is the tax on the increase of the value of land of urban nature, from its purchase to its sale.
Its percentage is calculated taking into account the cadastral value of your property and the years in which it has belonged to you (maximum 20 years).
How is it managed?
There are 2 types of Capital gains to liquidate:
The Municipal is indifferent to the sale price and is calculated on the basis of the cadastral value.
It belongs to the City Council of your city and you must pay it within 30 days after its sale, going to any Office of Attention to the Citizenship. OAC.
The Treasury or IRPF is a percentage of the profit obtained between what the house cost and the sale price.
You must pay it in the annual income tax return, the year after you have sold your property.
Approximate Cost
On the website of the Tax Agency you can calculate the cost of the Municipal.
And on the Treasury depends on the case. But for guidance:
– 19% for the first €6,000 benefit.
– 21% from 6,000 to 50,000
– And 23% for the rest.
You are exempt from paying in the following cases:
– When you sell your usual home and reinvest your profit in the purchase of another usual home (you have a term of 2 years).
– If you are over 65.
– When the sale results in no profit margin.
– Or if you award your property as payment method.
Property Tax (IBI):
What is it?
It is a tax that you must pay once a year, for owning your home. It runs from January 1.
It belongs to the City of your city and you pay through your bank.
It is important to be free of charges before signing the deed. And at the time of signing, you must provide the last 4 IBIs paid.
How is it managed?
Since it is annual, it is usually negotiated between the parties, so that both pay only what is due to them.
Therefore, the IBI of the year in which the sale is signed is paid prorated, depending on the months in which each one has enjoyed the property.
Approximate cost
It is calculated from the cadastral value of your home and its characteristics. But being municipal, it varies. Approximately 0,4 % to 1,1 %
HOW MUCH DOES IT COST TO BUY A PROPERTY IN MALLORCA?
If you want to buy a property, the thing is a little different and almost everything is on your own.
But I’m telling you, it’s usually less complicated. So, pay attention because now you will know the expenses, fees and taxes that you are supposed to pay to buy your new home.
Let’s cut to the chase.
THE COSTS YOU BEAR WHEN BUYING A HOME
Property Registry:
This expense corresponds to the registration of the sale in the Property Registry. Its price range is set by law and depends on the price of the property, since the cost of registering an apartment of 100 m is not the same as a house of 400 m.
Its cost is not very high in normal conditions, but on average around 300 €.
Notary:
These are the expenses that are generated when granting the public deed of the sale. It is calculated on the purchase price. And you deal with the Tax Office of the Balearic Islands.
These Notarial Fees set by law usually cost between 800 and 1,000 €, depending on factors such as the price of the property, number of copies, extension of the deed, number of mortgage holders, etc.
As a buyer, you take care of the first copy and the following.
Mortgage:
If you need to apply for a Mortgage, you must pay the bank for the management and processing of the Mortgage
This entails expenses for Valuation, Administration and Registry, corresponding to the writing of mortgage loan. And it is usually negotiated with the bank before signing the loan.
The appraisals are between 200 € – 700 €, and are subject to the dimensions of the property.
Note that to process it, the bank will ask for home and/or life insurance.
Management:
This service includes the pending registration and tax formalities. It is payable if you request a mortgage.
It is not a price set by law, it depends on the manager’s rate, but it usually ranges between 200 € and 400 €.
THE TAXES YOU TAKE WHEN YOU BUY A HOUSE
As for taxes, there are two variables you should keep in mind. Let’s go step by step.
When it’s new construction:
Value Added Tax
On the one hand you have the VAT, which is delivered to the seller of the property with each payment you make, through Treasury.
This figure does not vary according to the Autonomous Community.
The percentage on the purchase price is 10% for general housing, and 4% for official protection.
Documented Legal Acts
Then you have the DLA. A tax that affects the notarial, administrative and commercial documents associated with the sale. And that is imposed both in its writing and in the formalization of the mortgage.
It has 2 quotas:
A fixed one, which has a cost of 0.15 € per sheet and 0.30 € per sheet.
And a percentage variable, which is subject to each Autonomous Community.
In the Balearic Islands the tax is 1.20% on the selling price of the house.
Although those of official protection are exempt from payment. And when it comes to a start-up company or workplace, the percentage drops to 0.5%.
The good news for you is that since 2019, the Mortgage Law ruled that both the Notary’s Fees, as well as Registration and DLA corresponds to the banks. All savings account! 🙂
When it’s second hand:
Tax on Capital Transfers.
The TCT is also subject to each community.
In the Balearic Islands case: Total value of the property from (€) Rate applicable (%)
Until 400.000 8
from 400.00 to 600.000 9
from 400.000 to 1.000.000 10
from 1.000.000 11
This percentage can be reduced in the case of large families, young people and disabilities. And when the value of housing is less than €200,000 can also decrease to 5%, provided it is the first home you buy
Both the DLA and the TCT are settled within a maximum of 30 working days. The declaration is made through the Model 600. On the website of the Tax Agency you can browse more about it
Tax on Capital Transfers.
The TCT is also subject to each community.
In the Balearic Islands case:
Value of the property from (€) Rate applicable (%)
Hasta 400.000 8
De 400.00 a 600.000 9
De 400.000 a 1.000.000 10
A partir de 1.000.000 11
This percentage can be reduced in the case of large families, young people and disabilities. And when the value of
housing is less than €200,000 can also decrease to 5%, provided it is the first home you buy
Both the DLA and the TCT are settled within a maximum of 30 working days. The declaration is made through the Model 600. On the website of the Tax Agency you can browse more about it
WITH VIVOMALLORCA, A SAFE AND GUIDED PATH
And so much for your obligations both to sell and to buy your property. Have you seen that it is not so complicated if it is well explained?
In the end, what most generates uncertainty is not knowing the real estate sector. Which is normal, you can not be an expert at everything! And we don’t ask you to memorize all these strange concepts, their different values and conditions.
We just want to clarify your biggest doubts and give you the peace of mind that, as a Real Estate Agency that we are, we know very well what is best for you.
And we know in detail all that is due to you,
from when you decide to sell your property until you get to buy your new home.
So, in any of the two journeys you encounter, don’t forget that you can count on us to accompany you, advise you and help you to get your steps on the right path; without stumbling or getting lost in such an important moment as the purchase and sale of your home.
For any questions that you still have, don’t hesitate and write to us without commitment, here we are for you :).
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