6 golden rules for buying property in the Balearic Islands

1. as the buyer, obtain proof of the seller’s right of ownership of the property by presenting his notarised contract of sale ( Escritura Publica de Compraventa) or a recent extract from the land registry ( Registro de la Propiedad).

Furthermore, check whether the entry of the development in the land register corresponds with the details of the land registry ( Catastro).

2 Before making any written agreements with the seller, check the following points concerning the property:

If you are buying a plot of land with a house, make sure that the property has been built with a municipal building permit. Many people confuse the entry in the land register with the approval situation of the property in question at the municipal building authority.  Even if a house has been entered in the land register, from the point of view of the municipality it is only a legally constructed building if there is a corresponding municipal building permit and building inspection.
Have the last water and electricity bills and the certificate of habitability (cedula de habitabilidad) presented to you and make sure that there will be no problems with the water and electricity supply.
Check that the actual size of the property is the same as the size entered in the land register
Is the owner alone entitled to dispose of the property or does the consent of the spouse need to be obtained to make the contract valid?
Check all encumbrances resulting from the extract from the land register
Are there any tax liabilities that burden the property? In particular, proof of payment of the property tax (IBI – Impusto sobre Bienes Inmuebles) for the last few years should be provided. In this way, you will also know the amount of property tax to be paid in the future.
If the real estate object is subject to the Condominium Act, demand proof that the seller is not in arrears with the payment of the levies (certificate from the president of the owners’ association)

3. insist on the drafting of individual agreements within the framework of a private-written sales contract.  Have even seemingly minor assurances confirmed in writing by your contractual partner.  Form contracts, on the other hand, only cause confusion between the contracting parties, which can then lead to discussions during the notarisation process before the Spanish notary. One of the main functions of the Spanish notary public is to guarantee the buyer an unencumbered property purchase. However, his task is not to provide legal advice to the buyer or seller. The notary public certifies rather within the legal framework of what the contracting parties stipulate. It is therefore advisable to consult an expert advisor even in cases that at first glance appear simple. His fee amounts to only a fraction of the damage which can be caused by a contract which is unfavourable for one of the contracting parties.

4. insist as a buyer on the prompt notarisation of a notarial purchase contract and your entry as owner in the land register, even if instalment payments have been agreed.

5. if you purchase from the developer in instalments a property under construction that has not yet been completed, the seller must provide proof that insurance or a bank guarantee has been taken out in respect of the payment of instalments.

6. find out about the taxes and costs associated with the purchase of a property. Roughly speaking the additional costs such as notary, land registry and lawyer are about 3 to 4% of the notarial purchase price. In addition, there is either land transfer tax (in the Balearic Islands, progressive from 8% to 11% depending on the purchase price) or value added tax (10% for new buildings or 21% for commercial properties plus the stamp duty of 1.2% in each case).