After the 2008 crisis in Spain, the real estate market on Majorca is recovering quite well. The problems all around the arabic tourist regions as well as in Grece and other parts of Southern Europe are attracting more and more people to the secure and politicaly stable island of Majorca.
Mallorca continues to enjoy broad appeal amongst discerning buyers around the world and demand is strong and increasing. Whilst prices are definitely beginning to rise there is still scope for good deals depending on the market sector and the location. If you are interested in buying property on Mallorca there are still many good opportunities available.
The trend is going in the direction of luxury, sea front properties for sale or luxury Mallorca country residences. These properties are being snapped up by purchasers who are looking for a high level of privacy and who wish to make the most of life in the stunning natural beauty of the island. These clients are prepared to pay a handsome price for their discerning requirements and residences in exclusive locations.
Costs involved when buying property
The average price of housing in Mallorca over the last 12 months was about 1630€ / sqm
The following prices are given as information and submitted to possible changes
By purchasing a property for sale in Mallorca these taxes are applicable:
- Notary fees and charges of the property register (600€ and 2.000€)
- 10% VAT on the purchase of new properties, known as IVA
- ITP - Purchase Tax for purchase of not-new property (8-10%)
- 1.2% stamp duty which may occasionally arise known as AJD (Actos Jurídicos Documentados)
- If a lawyer is engaged the fees are usually between 0.5% and 1% of the house for sale purchase price.
Capital Gains Tax
In 2015 this tax reduced from 21% to 20% and in 2016 it will reduce further to 19%
The recent European Court of Justice ruling states that Spain can no longer discriminate between residents and non-residents. This means that inheritance tax for non-resident property owners reduces from 34% to a range of between 1% to 7% depending on the beneficiary.
Banks are now offering more mortgages with up to 70% financing available and rates as low as 2.75% in year 1 reducing to around 2% in subsequent years.