Buying property in Mallorca after Brexit
The Golden Visa - a real Brexit Bonus!
Invest 500.000€ in a property in Mallorca and you can stay on the Island for up to 183 days in a calendar year and get freedom of movement within the Schengen Area without affecting your UK fiscal status.
is the Spanish Golden Visa (GV)?
The Spanish Government introduced the Golden Visa in September 2013 with the objective of attracting more international investors outside of Europe. Formally known as the "Entrepreneurial Act of 27 September 2013 (Ley 14/2013)". Now British investors are officially non-Europeans, the Golden Visa provides a fantastic new opportunity.
What are the main benefits of the Golden Visa?
Freedom of movement within the Schengen Area without affecting your UK fiscal status. The GV offers a British buyer residency in Spain, freedom of travel with the option to stay for up to 183 days within the year without affecting the investor’s fiscal status in the UK. This is because the GV does not automatically entail tax residency: it allows multiple entry and any length of stays, days or years, so it does away with the 90 days in a 180 day period limit under the standard non-European tourist visa. Note that stays over 183 days in a natural year are one of the criteria by which an individual is deemed a fiscal resident by the Spanish Tax Office. This is the case for any individual regardless of nationality and this was the case for British nationals before Brexit.
Who can apply for a Golden Visa?
As non-Europeans, British investors can now apply for the Golden Visa if they meet the requirements. To qualify for the GV, the minimum investment value is 500,000€ for a property purchase that must be free of charges (if the property is bought with a mortgage the equity must be 500,000€ per buyer).
Can my family have GV status?
The main applicant for the GV can also add a spouse, civil partner, dependent children (minors or if they are of age then they must be economically dependent) or dependent parents. The spouse or civil partner must be in a legally recognised civil partnership. The main GV applicant can add his/her spouse or partner with the minimum investment of 500,000€. If they are not in a legally recognised and documented relationship ie ‘simply living together’’ each spouse/civil partner will need to invest 500.000€: a purchase of 1,000,000€ between them in order to apply for 2 GVs.
What’s the process?
If the GV application is submitted in Spain, it is obtained for an initial period of 2 years, renewable for another 5 years.
If the application is submitted in the UK, via the Spanish Embassy, it is valid for one year. Once the applicant is in Spain, then the 2-year permit can be obtained and thereafter renewed for a period of 5 years. Thereafter, if the applicant has been residing in Spain for those periods, then proper residency is obtained, without the need to continuously request renewals of the GV
Spanish Military permission
What is Spanish Military Permission?
The requirement for Spanish Military Permission is a law that dates back to 1975 and affects "real estate restricted access areas for non-EU citizens" and is required for purchases of property on rural land in Mallorca, and the rest of the Balearic Islands.
Do all British investors need military permission to buy in Mallorca?
Depends. The requirement for Military Permission only applies to property on rural land, for example, country properties , farmhouses and plots in the countryside. Urban areas, modern villas in residential areas, aparttments, in general properties located in Palma, or villages and urbanisations are not affected and DO NOT REQUIRE A SPECIAL PERMIT.
How long does it take to process the permission?
If the property is on a plot that is less than 2,000m² then the application goes to the Ministry of Defence in Barcelona and this takes a shorter period - approximately 4 weeks. If the plot is over 2,000m² the application goes to the Ministry of Defence in Madrid and it can take up to 4 months. However, these are approximate time guidelines that may vary (more or less) depending on the strength of the processing teams. Our advice is therefore to allow plenty of time when considering the purchase of a country home.
I am in the process of buying a rural property and I haven’t got this permission – is it that important?
Yes, it is essential and without it the Land Registry will not register the purchase acquisition. Furthermore, the permission is required to complete the Deed of Purchase at the notary. If the military permission has not been received within 18 months, the purchase will legally be considered null and void. We therefore strongly recommend that you allow plenty of time when considering the purchase of a country home and start the process of application as soon as possible.
Please note that in time, it is likely that an agreement will be reached between the Spanish and British Government on this law to extend the special treaty that is already in place for Swiss and Norwegian buyers.
Tax benefits for investors in Mallorca - the “Beckham” Law
The “Beckham” Law, so called because the footballer, David Beckham, was one of the first in Spain to take advantage of its benefits, is a Spanish tax law passed in 2005 that enables all foreign workers that have contracts with a Spanish company, or a company established in Spain, to be taxed as a non-Spanish residents under the Spanish Non-Resident Income Tax rules. A special flat rate tax of 24% on the first 600.000€ of income generated in Spain applies. Thus, they will only be taxed on income earned in Spanish territory, and not on income earned elsewhere while living in Mallorca. For more information visit: https://lexbeckham.com/beckham-law/
Do I need a Lawyer to buy a property in Mallorca?