Press | Estate Search Mallorca

Real Estate News

The Financial Times announced Majorca number 5 of the best 10 safety places to buy property in. The much-publicised Spanish property downturn has not had much of an impact on the main luxury market in the Balearics because of a balanced supply-and-demand situation driven by fairly tight control on new development and continued purchases by domestic and overseas buyers. Recent road improvements have added to the island & rescue’s appeal, low-cost airlines have improved flight frequency and 2009 will see the extension of the rail network link from Palma via Inca and Manacor to Arta. The prime locations are Puerto de Andratx and Palma Old Town in the south-west, Puerto de Soller, Valldemossa and Deia in the west and Formentor in the north, with average prices from €6,000- €7,000 per sq metre. To the question how can a real estate agency survive all this years in an overcrowded market in Mallorca Our answer is simple, interest, enthusiasm and excellent client service – also after a sale.
The response from our loyal clients shows that we have gone down the right road.

Rolf Mosczinsky, Cio Mallorca Residence Real SL

Reform law to the Spanish income tax has come into effect as of January 1st, 2007

The reform law has a substantial effect on the real estate sector. Reduction of the profit tax regarding real estate sales of non-residents from previously 35% to 18% as of January 1st, 2007, is to eliminate the asset administering Sociedad Patromonial (S.L.)

The benchmark for real estate sales profit tax for residents and non-residents is 18%. The past privilege of 15% of profit tax for residents has been abolished. However, non-residents still have to fulfil an advance payment of profit tax to the Spanish tax authorities on the day of the signing of the Title Deed (Escritura), normally at a notary’s office. This profit tax is 3% of the difference between the purchase price in the previous Title Deed and the purchase price in the title deed to be signed.

Abolishment of the asset administering S.L.

With the reform law the asset administering company is abolished. Companies are obliged to provide all the legal documents to dissolve the company within the first six months in 2007, and to complete the total dissolution of the company in the next six months in order to have the company removed from the trade register. Whether the company should be incorporated into an active S.L. (at present at 30% to 35% profit tax) or the real estate property should be held in private is to be discussed in detail with one’s lawyer or tax advisor.