NEW REGULATIONS FOR REAL ESTATE AGENCIES IN MALLORCA AND THE REST OF THE BALERIC ISLANDS

This came into effect November 2024 and aims to enhance professionalism and consumer protection in the real estate industry

The key aspects of these new regulations are:

Registration requirements

Real estate agents operating in the Balearic Islands must now register with the Official Real Estate Registry of the Balearic Islands (ROAIIB)

To be eligible for registration, agents must meet several criteria:

1. Physical address: Agents must have a publicly accessible office with a postal address in the Balearic Islands.
2. Professional qualifications: Agents must demonstrate their expertise through minimum one of the following:
   • A university degree in relevant fields such as law, engineering, or architecture
   • At least 200 hours of specialized training in real estate
   • A minimum of 4 years of experience in the real estate sector
3. Insurance requirements:
   • Liability insurance
   • Casualty insurance

Consumer protection measures

The new regulations emphasize transparency and consumer protection:

• Agents must provide detailed information about properties and assist clients in obtaining additional information from relevant sources.
• All real estate contracts must include the agent's official registration number.
• Agents must clearly establish marketing conditions through signed agreements with sellers.

Compliance and enforcement

• Non-compliance with these regulations is considered illegal and may result in sanctions.
• The regulations aim to eliminate "amateur agents" and ensure only qualified professionals operate in the market.

W Mallorca Invest's compliance

• 250 hours course on legislation on real estate and land and sale of these, in addition legislation on rental properties
• In June 2024, 5 years of proven experience in the real estate sector in Mallorca
• Operated by TodoWanre S.L.
• Membership number 00663 in ANAI/API (Asociación Nacional de Agentes Inmobiliarios y el Colegio Oficial de Agentes de la Propiedad Inmobiliaria)
• Registered in the official ROAIIB with number GOIBE605090/2024

This information assures clients that W Mallorca Invest meets the new legal requirements and is committed to professional standards in the Balearic real estate market.

BUYING A PROPERTY IN MALLORCA

Stages in the completion process:

• The property is selected and the terms agreed upon between buyer and seller. The property must then be secured.
• This is done through an Arras, a private contract between the two parties.
• The custom is that the buyer's lawyer writes this contract.
• When both parties have accepted the terms in the contract, the custom is that the buyer pays 10% of the purchase price as a deposit (to be withdrawn from the final payment) and to an account of the notary of the buyer’s choice.
• On completion a deed of conveyance “escritura pública” must be signed by both parties under notarial supervision in Mallorca.

Legal fees:

• Notary’s fees are paid by the buyer, and it is advisable to appoint a local lawyer, who speaks the buyer’s language or a language convenient to the buyer.
• The lawyer will carry out a title search and advise the buyer on all aspects of the investment.

Property purchase taxes:

• In any property transaction in Mallorca there is a transfer tax ITP-Impuesto de Transmisiones Patrimoniales, if the purchase is between private persons or if the seller is a developer (new built properties) instead you pay VAT + a notarization fee/Stamp duty.
• In all cases there is a surplus value tax, Plusvalia (not to be confused with capital gains tax to be payed by the seller on the profit made when selling the property).
• Plusvalia is a municipal tax on the increase in value on the land only and it is paid by the seller.
• ITP depends on the purchase price
• VAT is 10% of the purchase price (only on new built)
• Stamp duty is regional and 1,5% in the Balearic Islands
• The deadline for payment of stamp duty is 1 month after signing the notarial Deed.
• Within the same time, the buyers layer make sure that the notary have all the required information and enters the property title deed = Escritura Publica in the official land register office.

Ownership

• Apart from individual ownership, a property can be owned by one or more companies. Owning companies can be Spanish, from countries with double taxation agreements with Spain, a Spanish daughter company to the buyers company (when the buyer is not Spanish) or offshore or a combination of these.

Lawyer and legal fees

• Generally between 0,7-1,5% of the purchase price - This however is legally regulated and can vary between law firms.
• Property valuation (Tasador). This is only necessary if you are getting a mortgage.
• Estate agency fees (paid by the seller) - This is generally 5% on the final purchase price of the public deed to be paid at the notarization of the purchase.
• Notary fees, inscription into the land registry (Title deed tax and land registration fee) approximately 1-2,5 %. 1,5% in the Balearic Islands.