I have seen how many times, purchasers complete without legal assistance and they are under the impression that they have signed something different and are surprised when they are told what they have signed. It is also frequent to see how clients were aware of what they were signing but didn’t undertake the corresponding due diligence on the property before purchasing and on doing so after completion, were unable to claim or change anything. Sometimes and only sometimes, the only remaining option is a court proceeding, which usually involves high costs and considerable delay, both of which are exasperating for anyone.

It is also frequent to see how once the client has purchased he/she forgets about the paperwork and does not wish to know anything more about this matter. This is a big mistake. My advice would be to save every official document, every invoice, the Notary’s fees, lawyer’s fees, any renovation works’ invoice, etc. Also the habitability certificate is a document you should definitely conserve. The day you wish to sell you will want to deduce as many costs as possible from the capital gains tax and you may also need to hand over some of these documents to the purchaser.

Should you use the property for yourself and family or should you rent it out, in both cases, the annual non-resident income tax declaration has to be handed over. Moreover if you are renting the property out you will also have to hand over quarterly tax declarations. There are many non-residents who haven’t been informed or who haven’t informed themselves about the obligation of handing over this tax. The tax form has to be done and handed over by the taxable person, the tax office won’t send a request (this could well be different in your country!).

Another tax declaration that you have to currently hand over is the wealth tax declaration, but this is only if your wealth’s value in Spain amounts to more than 800.000€ (If the majority of your wealth in Spain is in the Balearics). The authorities announced in December that this tax will be removed in 2016, however this might not be the case (It is not the first time that this has been announced).

As owner of a property, every year the Town Hall of the municipality where the property is located, will send you a council tax payment order. Don’t wait to receive it in order to pay, the letter might get lost and this doesn’t absolve you from the obligation of paying the tax. My advice here is to pay the Town Hall’s taxes and rates setting a direct debit order through your bank in Spain.

There may come a day, when you decide you do not want to retain the property any longer, you might think you are getting old and it would be a good idea to sell it or to donate it to your children, etc. In this case you should seek legal assistance once again, as the tax implication of one or other option will help you decide what to do with your property. We have seen in the last few years how tax regulations are constantly being amended and changed, therefore, if you asked for advise one or two years ago, what you were told at the time is not necessarily the best option today. Thus the advice here is to ask for legal assistance whenever you are concerned about how to proceed, but check again just before completing.

Whenever you transfer the property, the capital gains tax declaration is to be handed over within the stipulated timeframe. Don’t think that because you have nothing left in Spain the tax office won’t check with your country’s authorities. We highly recommend to duly pay this tax.

If you have read this piece of advice, it is because you have or are going to acquire property in Mallorca, be congratulated, it is a privilege to be able to enjoy this amazing island, its mountains and sea without having to worry about obligations and paperwork, so sit back and chill out, with me, you are in good hands!