All About Buying a Plot of Land in Mallorca

What are the questions you should be asking yourself about buying land in Mallorca?

About buying land plots in Mallorca

10 Questions about buying land plots in Mallorca

Terreno: Plot of land

Buying a land plot in Mallorca to build a new house on is exciting, but do you have all the information you need? Are you aware of the extensive due diligence needed? Are you being properly informed?

In order to help you ascertain whether buying a land plot in Mallorca is a good idea and making an informed choice on your purchase, here are 10 land buying questions to ask first:

1. Do you have a topographic survey for the plot you want to buy?

Once your land plot in Mallorca is surveyed professionally you will know exactly how much land (acreage) there is. A topographic survey or grading plan will give you a 2D representation of the site with elevation changes in the land and help you decide the best location to build and determine the most suitable access to the plot, as well as showing you if and where there are utilities, trees and any other relevant features.

This will help you evaluate the site and make the best and most informed decision on where to build your new home.

2. Does the land plot have clearly marked boundaries?

The Catastro (Land Register) will show you exactly where the property perimeters are located and whether there are any structures encroaching onto the site, which will affect the plot. Therefore, you will want to see exactly where the boarders of the plot of land are. In the countryside these are often just poles sticking into the earth, in town however, it is more discernible, with an empty space between two existing buildings. 

3. What are the CC&R’s? And is the property title clear?

Covenants, conditions, and restrictions, which are also known as CC&R’s, apply to residential areas and neighbourhoods that have a drafted set of rules to regulate appearance, usage and maintenance of the development. The size of the property, the design, number of windows etc. may be regulated in the area you wish to buy land. 

In Mallorca, building a new property in town and in the countryside requires you maintain a certain traditional look and carries certain restrictions in terms of exterior appearance, number of windows and size, colour of shutters, and other external features which will effect the overall aesthetics of the area. 

A property title is considered clear if it is free of liens, easements, and other encumbrances and therefore worry-free. Establishing this is vital and will save you money and time in the long run, and can be carried out by a title company.

4. Does this plot of land have planning permission?

Fnd out if the land you want to buy has building permission (permiso or licencia de obra). You can check this at the local town hall (Ayuntamiento). A building permit can cost 4% of the estimated construction costs, depending on the figure set by the Spanish local authorities. Your lawyer or you will have to look at the Urban Plan (Plan General de Ordenación Urbana) at your local town hall. This will state whether or not the plot you wish to buy has any building restrictions, is in a urban or rustic zone, and whether you will be obliged to allow public access. Also, check future plans. 

5. Do you have a preliminary title report?

The preliminary title report is a very helpful document, which contains a wealth of highly useful information on ownership, vesting, title defects, and anything recorded against the home, such as liens, encroachments, or easements.

The title company will compile a report from county records to issue title insurance for the property and any liens or encumbrances will be considered exceptions to the title report. 

Her are 3 things you should review carefully: 

The legal description: It is a written description of the property’s location and the boundaries of the plot in relation to the nearby streets and intersections.

Property taxes: A property cannot be transferred to a new owner with outstanding property taxes due and must be settled beforehand.

Mortgage liens: The largest lien due is usually listed first. A property cannot be transferred to a new owner with outstanding property taxes.

Therefore, a preliminary title report will give you the opportunity to have the items which are objectionable removed.

6. What utilities are available in the area?

Buying a plot of land with access to utilities will significantly lower your costs, so establishing what existing utilities are available and the infrastructure provided is essential.

There are 5 main utilities to consider before you remove contingencies during escrow:

Power supply: Is there an available power supply to the property? Electricity lines overhead may not be connected to the plot. 

Telecom connection: Telephone lines, cable and satellite, high-speed internet and fibre optics are all mainly available within the towns but are not all available in the countryside. Find out what your options and if town supply is not readily available, explore alternative options. For example, there are Internet providers which for remote villas.

Gas lines: Natural gas is not readily available in Mallorca. Old fashioned homes still use butane gas for cooking and hot water, which is bought or delivered locally. gas oil can be supplied by truck to a remote villa as well.

Water supply: Is there a well on the property or is the local water supply available? Check too if a water meter is installed and if not, what the costs are to install one.

Sewage: remote fincas and villas in Mallorca often have their own septic tank. If it doesn't, you will probably need to have one dug and installed. Check if this is the case. If you are buying an urban plot, see if the property is connected to the municipal sewage lines.

For remote plots of land without significant utility supplies it is worth calculating where existing supplies are located, distances they will need to be taken from and the expense of doing so.

7. What is the status of tax payments on the property?

The owner will most probably know about current taxes on the property, but if you are in any doubt, check the preliminary title report for the status, recent taxes and the annual tax amounts to be paid. Understanding the tax costs will help you determine what your annual ongoing costs will be. 

8. Do you have a geotechnical report?

A soil report helps you understand the earth conditions, slopes, etc. and is useful for the structural engineer designing your new home. On flat solid ground you may not require a geotechnical report to build a property, build in areas with expansive soils or on steep slopes, as can be found in the foothills and coastal areas of Mallorca, you will most probably require one to build the foundations.

9. What are the zoning laws?

Zoning laws in Mallorca are becoming fairly strict, especially in rural areas. You will want to know whether the plot of land you are buying is in a residential, urban or rural area, whether the area is protected and what the building restrictions are. Zoning laws can decree how many units or buildings you are allowed to put on the land, the size and height of the building, as well as where you can build. Speak to the local planning office to find out exactly what the zoning laws in your area say about building new properties.

10. Are you competing with another buyer?

Are there other buyers placing offers on this plot of land? Though land is not always as quick to sell as built properties, in Mallorca, it is highly sought after, and if all the above items are in place, it is likely you will be competing for the sale

In this case you will need to make your best offer.