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Christian Wolf

Office:
Carrer de València, 22
07760 Ciutadella de Menorca
Islas Baleares
Spain

Tel. +34 602 491 493
E- Mail: info(a)villasinmenorca(dot)co(dot)uk

Buying a property on Menorca - How does it Actually Work?

Here is a brief overview of the various types of agreements that can be made when purchasing a property on Menorca. There are several types of contracts, that you need to know about:

  • The option contract
    It often takes some time from the moment the purchase decision is made to the date of notarisation. They have to request documents, obtain information and plan financial decisions with a financing procedure. In order to secure the buying intention of the real estate, many buyers sign an option contract and pay a deposit for the real estate.
  • The contract stipulates that
  • The reservation period of the property

Reservation Deposit

  • If the booking does not take place the reservation fee is non-refundable.
  • Accounting of the fee on sales price at the moment of purchasing
Royalty Free Stock Photo number: 114018235 Buying a property on Menorca

The Sales Contract
In Spain, a private contract of sale is valid for the conveyance of a property. The authentication of the contracts with the real estate purchase by a notary is not obligatory. After Spanish right a privately written contract is legally binding in written or verbal form. If the purchaser and the vendor come to an agreement on basic terms (Contract partners, item purchased, price, terms of payment) the contract becomes valid.

The Escritura (notarial deed of sale)
The notarial deed of sale registered in the land register guarantees legal certainty for the acquisition of real estate in Spain. The notarial treaty is called Escritura pública. It is recommended to have the purchase of a private real estate certified by an Escritura pública.

The Escritura (notarial deed of sale)
The notarial deed of sale registered in the land register guarantees legal certainty for the acquisition of real estate in Spain. The notarial treaty is called Escritura pública. It is recommended to have the purchase of a private real estate certified by an Escritura pública. The notarial document ensures your right to entry of property in the Spanish land registry.

Frequently questions of our customers regarding the purchase process

Discounts - Negotiating the sale price is possible
Mandatory purchase of a real estate? - Legal security after registered notarial deed of sale
Maturity of the down payment, balance payment - Option contract with down payment - balance payment: with signature of the notarial deed the entire purchase price is due for payment.
Funding - Financing calculators, mortgage calculators for financing offers with fixed interest rates, real estate finance with favourable credit ratio
Financing possibilities - Information on construction financing, follow-up financing
Desired price - Determination of equity capital, budget
How much additional costs should be taken into account when buying a property?
In general, additional costs by 10 % as a basic rule of thumb!

Taxes on buying abroad - Spain
Rates: 0.2 - 0.6 %
Real estate transfer tax: 8 - 10 %

The expenses for the notary and the land registry office
Notary fees are paid by the purchaser. If you calculate with notary charges amounting to 1 percent of the sales price. In some cases the fees are even less.
You generally charge fees for land register registrations at approx. 1 percent of the purchase price. Discrepancies depend on area and property.

Who pays the broker (commission)
After the successful mediation of a real estate, the broker gets a commission of mostly 5 % from the seller. After signing the notarial sales contract the commission payment becomes due, once the purchase price has been paid in full.

Expenses for owners of a property on the Balearics
Depending on the size of the property. A villa is more costly than an apartment!

Calculate taxes and operational expenses:
Annual current taxes - the property tax must be paid by the property owner. The cadastral value of the property is the basis for assessment. You can obtain current tax rates from the local council.

Expedient Insurances - Building & Household Insurance including natural disasters and property rights protection
Water / electricity / telephone - current variable costs
Get house money information on expenses, such as amount of house money in residential complexes (service charge accounting)
Personnel- To upkeep and maintain a large property, you will require personnel service, this monthly cost should be taken into consideration.

Which documents are required for purchase on the balearics?
Notice differences to the buying of a property in your country and make preparations (documents) - checking list

The tax identification number NIE
As an owner of a property you need the NIE number. The identification and tax number for foreigners. The NIE is registered in the Spanish Central Register of Non-Spanish Citizens by the General Police Department called the Guardia Civil, and is valid for an unlimited period of time and nontransferable.

Giro account in Spain (cheque, current debits)
You will need a bank account in Spain for financial matters - keep in mind important points

The final amount of the purchase price is usually paid to the seller by bank checks from a Spanish bank.
Money laundering: when the bank account is inaugurated, the bank carries out a money laundering filter and ensures that the rules are complied with.

Once ownership has been conveyed, there are charges that must be paid for your property, which are made via a Spanish bank account, e.g. gas, electricity, internet, water, etc.

Evidence of shareholders' equity and income
Check list for financing with Spanish bank - required documents of various financing variants, for example with hypothec: mortgage:

  • ID card, passport
  • NIE (Spanish tax number for foreigners)
  • Payroll accounting, assessment of income tax
  • bank statements
  • SCHUFA report
  • Equity statement ( excerpt) (securities account, financial investment, time deposits )

How does the real estate broker help me to buy a property?
In addition to consultation and inspection date you can use our service and experience as a professional real estate agent in Spain:

Verification of the real estate papers

  • Facilitation between vendors and purchasers
  • The best possible help with financing decisions and financing variants
  • Attendance at notary visit
  • Services for owners (such as power, Internet and telephone)