Buying property in Mallorca. Your 2023 guide

Mallorca offers a perfect blend of breathtaking natural landscapes, history, and lifestyle. With its beaches, charming villages, and bustling city life, Mallorca provides an ideal setting for owning a property that can serve as your getaway or a new home for a fresh start.

Wondering what you need to know before diving in? Look no further. This guide will walk you through the most important tips and steps for buying property in Mallorca as a foreigner.

Living in Mallorca: what you need to know

To begin, let's delve into some fundamental information you should be aware of Mallorca if you are contemplating buying a property here:

• Location: Mallorca is one of the Balearic Islands, located in the Mediterranean Sea off the coast of Spain
• Climate: Mediterranean climate with hot summers and mild winters
• Currency: Euro
• Main languages: Spanish and Catalan; English, German, and French widely spoken
• Population: 950.770
• Number of British expats in the Balearic Islands: approx 18.000

Cost of living in Mallorca compared to the UK

The cost of living in Mallorca is generally lower compared to the UK across various spending categories. 

To give you an idea of the price differences, here are a few examples:

• a three-course meal for two people costs around 38£, compared to 80£ in the UK
• a domestic bear cost around 3£, compared to 6£ in the UK
• the price per square meter for an apartment in Mallorca can be up to 70% cheaper than in the UK, depending on whether it's located inside or outside a city center

Remember that individual spending habits and lifestyle choices can significantly impact the overall cost of living.

What’s the property market like in Mallorca?

Mallorca's popularity as a holiday destination and appealing lifestyle contribute to a thriving real estate market. 

As of January 2023, the average property price per square meter in Mallorca stood at 3,706 EUR, representing an average annual price increase of 10.5% since the beginning of 2022 (when it was 3,459 EUR/m2). 

Despite increased inflation and the ongoing European energy crisis, Mallorca's property prices continue to rise steadily, outperforming other European real estate markets.

Can foreigners buy property in Mallorca?

Foreigners are welcome to buy property in Mallorca as Spain has an open real estate market that embraces international buyers. Whether you are an EU or non-EU citizen, you can purchase property in Mallorca. 

However, having a foreigner's identity number (NIE) to buy a property in Mallorca is essential. The NIE is as a unique identifier for non-Spanish residents and is required to purchase property and secure a mortgage.

By the way, a mortgage can significantly enhance your budget for buying a property in Mallorca. Make sure to analyze Homevest for a comparison of the available mortgage options in Spain.

How easy is it to get a mortgage in Mallorca as a foreigner?

Obtaining a mortgage in Mallorca is the same as getting one elsewhere in Spain.

Several Spanish banks, including Sabadell, BBVA, and Santander, offer mortgages for foreigners interested in buying property in Mallorca. 

The good news is that most banks do not require translation or legalization of your English documents. Sabadell and Bankinter accept German, French, or Swedish documents without translating.

However, it's important to note that mortgage conditions may vary depending on the bank and individual circumstances; here are some standard factors:

• Permanent employment or solid self-employed background with 2-3 years of experience
• Minimum 6 months of employment
• Monthly net income of 2000-2500 EUR
• Indebtedness ratio not exceeding 40% of monthly net income
• Minimum 30% deposit
• Clean credit history

Lenders prioritize assessing mortgage repayment capacity based on a reliable income. Keep reading to find a documents checklist for a non-resident applying for a Spanish mortgage. sources and stable employment. 

What are the best Spanish mortgages for buying a property in Mallorca?

Sabadell, Cajasur, Unicaja, Bankinter, BBVA, Santander, Caixa, and Hipotecas.com are among the Spanish banks that provide mortgage options for foreigners interested in buying a property in Mallorca.

Finding the best Spanish mortgage for non-residents involves considering more than just the interest rate; it should be tailored to your personal and financial situation, considering factors such as loan options, eligibility criteria, and required documentation.

Continue reading for a comparative analysis of the best Spanish mortgage loans available for non-residents.

Homevest simplifies obtaining a mortgage in Mallorca from abroad

Applying for a mortgage in a foreign country can be overwhelming, involving repetitive document preparation for each bank application. Fortunately, Homevest provides a time-saving solution. 

Homevest is a digital service that lets you streamline the cross-border mortgage application process and use the mortgage comparison calculator to assess the costs associated with different options. With Homevest, you can quickly and efficiently navigate the mortgage application process in Mallorca, allowing you to make well-informed decisions about your cross-border mortgage.

What is the cost of buying a property in Mallorca?

Factors like location and property type influence the expenses associated with buying a property in Mallorca. Whether you're acquiring a new property from a developer or a resale property from an individual, it's essential to account for taxes such as Value Added Tax (VAT), Transfer Tax, and additional fees for notary and registry services.

Suppose you buy a second-hand property worth 350,000 EUR in Palma de Mallorca. In addition to the sale price, you will have to pay another 34,450 EUR for the following taxes: 

Simulation rates on June 27, 2023. Prices may vary depending on the value of the property

Gaining a clear understanding of the taxes and costs involved in purchasing property in Mallorca is essential for foreigners. Continue reading to discover everything you need about the taxes you pay when buying a property in Spain as a non-resident.

Buying a property abroad is a significant change, and navigating the system in a new country can be challenging. Luckily, Homevest makes purchasing your dream house in Mallorca much more manageable.

Sources used and checked in June 2023:

1. Population of the Balearic Islands in 2022
2. Balearics has the largest foreign population in Spain
3. Cost of living comparison between London and Palma de Mallorca
4. Mallorca Property Prices & Market Report 2023
5. Sales cost calculator

We recommend obtaining professional or specialist advice before taking or refraining from any action based on the content in this article. The information in this article does not constitute legal, tax, or other professional advice from Homevest Limited. Prior results do not guarantee a similar outcome. We make no representations, warranties, or guarantees, whether express or implied, that the content in this article is accurate, complete, or up to date.