Buying property on Mallorca – What you should know about financing
Some banks and real estate portals advertise with enticing headlines promising a property’s easy and 100% financing. It is not quite that simple. You should always question these offers critically and exercise caution.
A mortgage in the full amount of the purchase price does not normally exist
As a rule, only 80 % of the pure purchase price is granted. For non-residents and second homes, it is even only 70 %.
What costs will you incur?
In addition to the 20-30% of the purchase price, there are taxes and fees to pay. For an existing property, it is between 8% and 11.5% land transfer tax. For a new build property, 10% VAT is to be expected.
For the approval of financing, the value of the property must be estimated by an appraiser. This process is called “tasación” in Spain. The costs for this depend on the value of the property. Furthermore, there are costs for the notary, the land registry, the Gestoría and the lawyer.
Our recommendation: If you decide to buy a property in Mallorca, make sure that you have at least 40% of your own capital available.
Age and income
Age and income are also two important factors. Most banks require that the mortgage be paid off by the age of 70 and mostly only instalments of 30-40% of income are accepted.
CCC Real Estate offers you through renowned financing brokerage agencies:
- Your personal contact person speaking your language
- A contact person for financing offers from all Spanish banks
- Advice on comparing offers
- Time-saving and faster processing
- Advice considering your personal situation
- Optimal financing conditions through negotiations with the banks
Do you have further questions on this topic?
With pleasure we arrange the contact to financing experts, local Spanish banks and savings banks on Mallorca.
We will be pleased to send you your individual financing offer on request! Contact us now.
Source: Mallorca Zeitung