Buyer's Guide - Menorca

15 years experience as a CERTIFIED REAL ESTATE AGENT (API)

This guide covers good practice, taxes and recommendations so things are clear when buying a house in Menorca, ensuring your purchase is safe and free of nasty surprises.

Buying a house is not something most people are used to doing every day of the week. For that reason, we would like to give you some advice on a few essential procedures you should get informed on, whether buying a house yourself or through an agency.

Firstly, you have to take into account whether the house is new or used, as there are a few differences in the procedures to be followed in each case.

New Housing:

In this case the property development company should provide you with all of the documents you need before signing the contracts in the presence of a notary public, that is:

  • Ten-year insurance policy
  • Certificate of habitability
  • Notices from electric installer
  • Notices from plumber
  • Work conclusion from architect
  • Work conclusion from corresponding local authority

and, depending on whether it is a flat or apartment in a co-owned building, the appropriate master condominium deed.

If it is a single-family dwelling and in the event that a deed for the acquisition of the plot exists, a New Build deed should be drawn up. In both cases the tax due will be VAT, currently set at 7%, although certain regions offer deductions depending on the purchaser.

Used Housing:

This case the tax due is ITP (transfer tax) at 7%.

  • Check that the dwelling is not subject to any charges (tenants, mortgages, special contributions, etc.). In the event that it is, these should be settled before the purchase contract is signed.
  • Obtaining a certificate of habitability.
  • Check the state of drains, electric fittings, sewage connections, etc.

Nota Registal
Lupa
Taking into account what we have explained above, here are a few recommendations: 1. If you purchase the house through a Real Estate Agent, they should provide you with all of the documentation and ensure that everything is in good order. You may hire an advisor or a lawyer who you trust to carry out this work for you. In that case, they should also check that all necessary requirements are met for a problem-free purchase.

Request a register note from the area's property register. The register note will feature all of the registered information pertaining to the house, the size of its plot, the area of the dwelling, whether it is mortgaged or there are attachments on the plot. It is important that the note be as up-to-date as possible. The property register will issue the certificate in approximately three days.

Once you are sure you have found the flat or the house of your dreams, or the property that you have been searching for, and once you have a firm agreement with the seller, whether directly or through an agency, it is very important to have a purchase contract properly drawn up. The contract should put in writing all of the conditions agreed between the two parties, formalising all of the details. Generally speaking, when a purchase contract is made, a deposit is normally agreed (which may be non-refundable). Depending on how the deposit is set out in the contract, there may be different consequences as a result of a failure to comply with the contract. Normally, the deposit amount ranges from 5 to 10% of the agreed purchase price.

Certificate of habitability

Cedula de Habitabilidad
Lupa
This document is issued by the Island Council (Consell Insular) once all of the requirements for a new build have been met (it is valid for 10 years). If you need to renew it or if you do not have one, you can obtain it by "exclusion" (carencia).

Taxes:

Although the different taxes to be paid have already been indicated in this guide, you should bear in mind that there is a Treasury Department that checks the real value of urban and rural properties in the Balearic Islands. In order to avoid receiving a so-called complementary declaration, i.e. a letter from the Authorities, after they have checked the purchase amount declared in the deeds, stating that they consider it to be below the amount that should have been declared based on their calculations in accordance with the different laws covering this issue.

Euro symbolYou can get an approximate estimate of the value using the application provided by the Agencia Tributaria (Spanish Inland Revenue). All you have to do is fill in a series of boxes to get an approximate estimate of the purchase price that has to be included in the deeds in order to avoid problems (then again, why put a higher price in the deeds than the one you actually paid?). Unfortunately, with regard to the taxes that sellers have to pay, we cannot provide you with any guidance, as this depends on each individual's personal circumstances (resident, non-resident, retired, main residence, etc.). Nevertheless, we can help you with this sort of doubt if you explain your personal circumstances to us.

Legal and Register Costs:

Legal costs vary. If you have to arrange a mortgage, then legal costs increase considerably. The cost of recording a deed as public is around 3% of the declared value, if a mortgage is included. However, if you do not require a mortgage, taking a typical 100,000 euro purchase price, the notary public and register costs should be approximately 1,000 euro.

General Costs:

When purchasing property, it is important that you are clear on all monthly, quarterly, six-monthly and annual costs that your future home may have and that they are all fully paid to-date on the day of transfer.

Electricity:

Factura de Gesa
Lupa
The electricity provider in Menorca is Gesa-Endesa, although the supply market has been deregulated, and you can purchase this service from the company of your choice. Gesa bills its customers on a monthly basis from the beginning of the year and has made customer care offices available in Mahon, Calle Vasallo. The company's customer care hotline is 902 500 902. At the time you change the name on the deeds of ownership and any other document that Gesa may request to see, depending on the age of the property you are purchasing, the company may send a technician to inspect the dwelling's electrics and require the interested parties to update them if they are not suitable. The basic requirements that are checked are that the electrics work correctly, that the electricity panel has a limiting power control switch and the electrics’ earthing. This is an issue that should be remembered when drawing up the contract, as any potential expense should be covered by the seller, unless otherwise agreed.

Water:

Factura de Sorea
Lupa
The local authority is responsible for providing water. Some local authorities on the island, including Mahon, Es Castell and Alaior, have hired a company called Sorea to supply water, but there are also other companies that manage water supplies in some towns and housing developments, such as San Luis. Sorea bills its customers for water on a quarterly basis and has offices in nearly all of the local authorities areas where it works. The company's hotline is 902 250 070. You should bear in mind that Sorea will request to see the certificate of habitability before completing a change of name. You will not be able to carry out this process without this document. For older properties no certificate of habitability may have been issued yet or it may be out of date, as it is only valid for 10 years. For further information please read the section on the certificate of habitability. It is also a good idea to agree who is going to be responsible for this procedure, although the seller should provide you with this document.

Property Tax (IBI):

IBI
Lupa
This annual tax is paid to the local authority where your property is located and varies depending on the area of the plot and property itself. You can set the payment up as a direct debit, which is the most comfortable way to pay it to avoid any possible fines for late payment. It is a good idea to check that this tax has been paid to date.

Refuse Collection:

This charge is set and collected by local authorities. Some local authorities, such as Es Castell, include refuse collection in the IBI.

Co-ownership:

When purchasing a flat or apartment, there are normally joint costs for maintenance, communal areas such as gardens, lifts, cleaning, insurance, administration, etc. This may also be the case if you purchase a property in a private development, regardless of whether your home is a detached house, as there are still certain communal costs. It is advisable for the seller or the agency to inform you on the annual amount of these costs so as to avoid surprises in the future, as, once you have made your purchase, you may find yourself with a monthly bill to pay. Ask for a certificate issued by the co-owners’ association stating that all communal costs have been paid to date.

Insurance

If you have to take out a mortgage when purchasing a home, the banks normally require the inclusion of a clause stating that they will be the first party to receive payment in the event of accidents. We at Inmobiliaria Menorca would suggest that you purchase insurance or to check that you are covered by a policy from the first day you take ownership of your new home in order to avoid problems vis-à-vis third parties.

Benefits and Subsidies

Logo IBAVIThe regional and national governments currently make a range of benefits available to young people looking to buy their first home in the form of significant reduction in the ITP and improved mortgage conditions, if you meet a series of requirements as regards your income, the size of the property and other essential requirements to be eligible for this assistance. Inmobiliaria Menorca is committed to its customers in this regard, because we believe that our work goes beyond simply selling Villas, flats and apartments. Our work also includes providing you with information on all possible advantages within your reach. More information on these benefits can be found at ibavi.caib.es.

APIAt Inmobiliaria Menorca, real estate agents, our commitment to our customers goes beyond simply negotiating purchases, because we consider it our duty to inform our customers, whether sellers or purchases, since they trust in our management. We do not just complete the sale. We also provide you with all of our assistance for pre- and post-sale procedures: changing the name on bills, setting up direct debits, paying taxes, contracts, organising appointments at the notary public and all of the procedures involved in a properly managed property purchase

If you have any questions or wish to make an enquiry, do not hesitate to contact us.