Property Purchase in Pollensa

[fran64]

Yes Debbie, just received it, I will read it and come back to you:- )

Hi Tone. What area in PP will you be looking for???

 

[pollensa]

Hi Tone. What area in PP will you be looking for???

Tone's Wanted advert can be seen at puertopollensa.com/property_for_sale.html#wanted, if anyone knows of a property that may suit her.

 

[Matt357]

Buying a property in Puerto Pollensa

Good afternoon all,

I have just joined the forum today. I hope everyone is well and enjoying life in PP!

By way of introduction I live in London but have spent many great holidays in the Puerto Pollensa area. So much so that I have started to think about actually buying an apartment to be used by myself, my parents and my sister, initially as a holiday home but as time goes on more of a second home, eventually when I reach retirement (20 years away!!!) more of a semi-permanent home. I am keen (and know well) the Pinaret area and am generally thinking of a two bedroom flat, which once bought should do me for life. The timescale I have in mind is that I reckon I will be in a position to buy towards the end of next year (2013) so will have some time to do the research, groundwork etc and actually find a property I like.

I will be coming over in July for a holiday so will be getting my search underway then, and would be grateful for any tips, advice and suggestions anyone may have. Many thanks in advance!

Matthew

 

[pollensaman]

Hello Matthew,

Welcome to the forum. My parents bought a two bedroom apartment in Pinaret just over a year ago where they live full time and could not be happier, it is a very quiet and pleasant area to live.

There are several for sale in the area so you will be able to have a look when you start your search in July.

PM.

 

[alcanadakid]

My only advice is to take your time and not rush. It took us 18 months to find the right property, and we came over every 2 months to view about 8 properties a day for 5 days each time. In all we viewed about 200 properties, having short listed them from many more on websites.

It sounds a lot of effort but 8 years on we feel it was well worth it. In the end you get to know the market well and and are ready to snap up that "special" property when it becomes available.

We started looking in Puerto Pollensa but gradually widened our search and ended up in Alcanada near Port Alcudia. For us it was absolutely the right choice. Port Alcudia is an up and coming resort with many good restaurants and near to the fabulous Alcudia beach.

We also looked at Marbella, where the prices are cheaper, but we didn't like the much faster pace of life there. Higher crime rate was also an issue.

Can't really comment on renting the property as we don't rent. except to say that it appears that the period for rentals is very short and I think you need a licence.

 

[Smiddy]

Good Luck! IF your intending to rent then make sure you check with your community as some do not allow it. Another good tip is if you can't afford the property without any rental income, then you can't afford it! Other than that i would thoroughly recommend it, you will not regret it.

 

[Matt357]

Prospective apartment purchase

Good morning all,

Many thanks for your tips and suggestions. Keep them coming!

I know about the ban on letting apartments in Mallorca and in my view it is generally a good thing. With such a ban in place, and with serious fines for non-compliance (apparently E30,000!) 'investors' seeking a rental yield are dissuaded from buying such property. I live in London where the presence of many such people undoubtedly push prices up, and slightly distort the market geographically. In my opinion somewhere as beautiful and picturesque as Puerto Pollensa shouldn't really be simply for those seeking an investment return but should be for people to enjoy visiting/living there. When I buy my apartment (all being well!!) the intention is for it only to be available for family members.

Thanks again for all your help everyone. Obviously when I get closer will be looking for solicitor/notary recommendations as well. Looking forward to it!

Matthew

 

[Smiddy]

Matt, There's nothing to stop you renting out to friends who you know will look after it. Helps with the running costs! But, still treat it as a business, don't fall into the trap of not charging, or charging very little.

 

[Smiddy]

Tax on Apartments

With all the publicity around about the huge shortfall in tax revenues, all over Spain, i have various friends who have apartments and they have quite openly said they have never paid a penny of the "wealth tax" some going back many years. Now i know this "head in the sand" attitude is not advisable, when it comes to selling some little man will probably turn up at their door with a very big bill,. Why are the authorities not chasing these revenues, which probably run into billions nationwide.
It just concerns me that the authorities may take the easy option and increase the burden on the regular payers, rather than doing it the harder way, it can't be difficult.

Or i'm i just naive in paying?

 

[Nick]

Spanish wealth tax 2012 guide
The wealth tax returns to Spain but you probably won't have to pay it
A wealth tax is a tax on a citizen's total assets rather than income. Spain had such a tax up until 2008 but then instituted a 100% allowances effectively abolishing or suspending it. Until now when the government has brought it back as a temporary measure for the 2011 and 2012 tax years i.e. the tax declarations being made this year and next in respect of the previous calendar years.

This guide describes how the "new" tax will work focusing firstly on the allowances which mean, for all but the very wealthy, that their wealth tax will be zero.

Spanish wealth tax allowances:

Every taxpayer has the first €700.000 of their assets exempt from tax

€300.000 can be deducted from the valuation of the family home before it is added to the total asset calculation

These two limits were, respectively, €108.182 and €150.253 the last time Spain had a wealth tax so far fewer people are going to be faced with an extra bill this time. It is estimated that only 160,000 people will pay a total of €1 billion.

Operation of the tax:

The wealth of an individual is deemed to be their property, vehicles, jewelry, furs, antiques, intellectual property rights, savings and other financial assets. Their total valuation on the last day of the year is subject to the tax.

Property is to be valued at the higher of the "catastral valor" (official value on the property register) and the value in the deeds. For older properties in particular these are both values which could easily be substantially below market levels. This reduces still further the chances of you having to pay the tax.

Taxation of husband and wife:

Both are assessed separately. Jointly owned properties (and other assets) are split between the two, so usually only 50% of a house's value is carried forward to the asset total. In terms of the family home allowance this is divided between the husband and wife, so it is €150.000 each.

Spanish wealth tax rates:

After the taxpayer's wealth has been calculated (total minus family home exemption minus 700.000 allowance) then the following rates are applied:

Note on regional differences: This tax has been highly politically controversial with the right of centre PP opposing it. The tax is collected by the governments of the autonomous regions who have the right to change the rules locally. Some PP regions have apparently done so to make it more lenient, like those in Murcia and Valencia. For the details look at their government websites.

**************************************************************************

The bit containing the rates did not come out but hopefully this helps everyone who's an owner?

It appears to me that you have to have assets of over 700,000 euro's so a lot of us, inc. me, are exempt?

P.S. - this came from "Googling" "Spanish wealth tax" and brought up ADVOCO, Spanish lawyers and accountants.

Hope it helps.

 

[lollipop]

Even though you may not need to pay a wealth tax as a nonresident I believe you are still liable to complete a tax return. They assume that you rent out or gain from having a second home in the sun. I think it is calculated as 24% of 2% of the castoral valor which you find on your rates bill. Those percentages may be the other way round maybe someone who has completed their return can correct me.

 

[Nick]

Thanks for that.
Perhaps someone can advise then?

 

[Smiddy]

Thanks for that.
Perhaps someone can advise then?

Thank you very much for your post, i'm sure we'll find it a great help.

 

[alcanadakid]

Spanish wealth tax 2012 guide
The wealth tax returns to Spain but you probably won't have to pay it
A wealth tax is a tax on a citizen's total assets rather than income. Spain had such a tax up until 2008 but then instituted a 100% allowances effectively abolishing or suspending it. Until now when the government has brought it back as a temporary measure for the 2011 and 2012 tax years i.e. the tax declarations being made this year and next in respect of the previous calendar years.

This guide describes how the "new" tax will work focusing firstly on the allowances which mean, for all but the very wealthy, that their wealth tax will be zero.

Spanish wealth tax allowances:

Every taxpayer has the first €700.000 of their assets exempt from tax

€300.000 can be deducted from the valuation of the family home before it is added to the total asset calculation

These two limits were, respectively, €108.182 and €150.253 the last time Spain had a wealth tax so far fewer people are going to be faced with an extra bill this time. It is estimated that only 160,000 people will pay a total of €1 billion.

Operation of the tax:

The wealth of an individual is deemed to be their property, vehicles, jewelry, furs, antiques, intellectual property rights, savings and other financial assets. Their total valuation on the last day of the year is subject to the tax.

Property is to be valued at the higher of the "catastral valor" (official value on the property register) and the value in the deeds. For older properties in particular these are both values which could easily be substantially below market levels. This reduces still further the chances of you having to pay the tax.

Taxation of husband and wife:

Both are assessed separately. Jointly owned properties (and other assets) are split between the two, so usually only 50% of a house's value is carried forward to the asset total. In terms of the family home allowance this is divided between the husband and wife, so it is €150.000 each.

Spanish wealth tax rates:

After the taxpayer's wealth has been calculated (total minus family home exemption minus 700.000 allowance) then the following rates are applied:

Note on regional differences: This tax has been highly politically controversial with the right of centre PP opposing it. The tax is collected by the governments of the autonomous regions who have the right to change the rules locally. Some PP regions have apparently done so to make it more lenient, like those in Murcia and Valencia. For the details look at their government websites.

**************************************************************************

The bit containing the rates did not come out but hopefully this helps everyone who's an owner?

It appears to me that you have to have assets of over 700,000 euro's so a lot of us, inc. me, are exempt?

P.S. - this came from "Googling" "Spanish wealth tax" and brought up ADVOCO, Spanish lawyers and accountants.

Hope it helps.

Brilliant report!

 

[illeslex]

Good afternoon,

Our Law Firm is interested in clarifying the Wealth Tax.

The mentioned tax has temporarily been reestablished for the years 2011, 2012, 2013 and 2014, accruing on December 31st of each of these years.

A reduction of the taxable base regarding the exempt minimum of 700.000 Euros has been adapted for not only residents but also for non-residents.This is as aspect to be taken into account by you.

Therefore, all persons are required to declare, whose declaration results in a payment of the taxes and in any case, those whose properties and rights, which are valued in more than 2.000.000 Euros, although the quote results negative.

Another point to highlight is that only natural persons are taxed. Companies are not going to suffer this particular tax at all.

The tax rate ranges from 0.2% to 2.5%, depending on the scale of the tax.

Kindest regards,

 

[Rockape]

Not sure where else to post this, seeing as its last been used in 2014, but just wanted to comment on the seemingly big reduction in properties for sale in PP.

Just wondering if anyone is up to date with the local property market to suggest if its due to lack of sellers (fewer than usual) or because there is a glut of buyers? (more than usual)

 

[Gommar Goffer]

I am seeing plenty of For Sale signs. Rightmove currently has 346 properties, ranging from 130k to 5+m (All of Habitat)

 

[bobley]

Couldn't help but look myself. Surprised to see many of the houses I looked at over 4 years ago are still on there!

 

[Rockape]

I am seeing plenty of For Sale signs. Rightmove currently has 346 properties, ranging from 130k to 5+m (All of Habitat)

From my experience, Rightmove tend to keep stuff on their site for years after they've been sold, so don't take any notice of that anymore. Balearic Properties always seem to have loads but most of the stuff on their site is sold or reserved.