You have successfully purchased your property on Mallorca but as with any property purchase the expense does not end with the exchange of contracts. There are always other expenditures when owning a villa or apartment anywhere in the world. If you own your property in the name of a company, there will of course, be the usual accounting fees and taxes to be paid on any profit from renting the accommodation. There will also be the filing of corporate tax returns in Spain and possibly in the UK.

If you are a private owner, and you are working, you will need a residence permit, and will need to file tax returns, showing any rental income. If you do not work in Spain, you will not need any kind of residence permit, to either live on Mallorca or own a property there. If you live in the property, and do not rent it out, there are minimal taxes to be paid. There is the I.B.I., this is an annual property tax similar to the annual property taxes in the UK, and this tax is levied by the local town hall.

On Mallorca, the property tax is just below 1% of the value, known as, valor catastral. This value may well be considerably less than the actual value of the property. That depends on what was originally declared to the city on purchase. Spanish sellers always want this to be shown as a lesser amount than they received, which is good for you, in that it lowers your taxes. But this could be bad in the long term, as when you sell the Mallorca property on, it may appear that you have made a larger profit than you actually did.

Property income tax is a tax on income derived from property, and is calculated by multiplying the declared value by 2%, then a tax base of 25% is arrived at. If you are an owner of a property on Mallorca, but are not resident in Spain, then you are liable for 'Property Wealth Tax'. This tax is calculated on a sliding scale that starts at .20% up to 2.5%. This tax is based on the declared value of the property, the taxman's estimate of the value and the actual purchase price declared on the deed of conveyance.

The only other tax on Mallorca property is the refuse collection tax, payable to the local town hall, and usually a minimal fee. If you live in a villa community, or an apartment, you will also have to pay community fees, for lighting, pool maintenance, and so on. These fees can vary to a huge extent, and should be strongly considered, when making a purchase decision.

Find out about Costs involved in owning a Mallorca Property at Mallorca Property

This article was supplied by Mac T. Wheeler, you can find out more about him over at his Freelance and Technology Blog

Source: www.a1articles.com