Buying Property and Living in Mallorca After Brexit: What You Need to Know

Whenever I meet a British expat living here, and ask them what type of Visa they have it always makes me envious when they say (rather smugly 😊) they moved here before Brexit.

It was undoubtedly a lot simpler to do so back then and nowadays it can be a time-consuming process fulfilling all the visa requirements.

Brexit hasn't changed the fact that UK nationals can own property in Mallorca as can other non-EU citizens. But owning property doesn't automatically give you the right to live here long-term, so you'll need to look into the right visa for your situation.

There are 3 visas available for those non EU citizens who wish to live in Mallorca:

  1. The Golden Visa
  2. The Non Lucrative Visa
  3. The Digital Nomad Visa
Here’s what you need to know:

The Golden Visa: Your Door to Mallorca

In September 2013, Spain introduced a program called the Spanish Golden Visa. This was designed to attract investors from outside Europe.

The idea was to make Spain an appealing place for people to invest their money, especially now that British citizens are considered non-Europeans after Brexit. This opens up a new opportunity for them.

Key Benefits:

The main advantage of the Golden Visa is that it allows you to live in Spain and travel freely within the Schengen Area without changing your tax situation in the UK.

You can stay in Spain for up to 183 days a year without becoming a tax resident.

However, if you stay more than 183 days in a year, you might be considered a tax resident by the Spanish authorities.

Who Can Apply?

British and other non-EU home buyers or investors who meet the necessary requirements can apply for this visa.

To qualify, you need to invest at least €500,000 in Spanish property. This investment must be free of any debts or charges.

If you're buying with a mortgage, you need to ensure that at least €500,000 of the property's value is fully paid up.

Including Family in the Golden Visa Program

When you apply for the Golden Visa, you're not just opening doors for yourself but potentially for your family too. The primary applicant can bring along their spouse or civil partner, their children who are either minors or still financially reliant on them, and even dependent parents.

For your spouse or civil partner to be included under the same €500,000 investment, your partnership needs to be officially recognized. And bear in mind if you are buying a property in joint names the person who is the primary applicant must be proven to have invested at least €500,000.

You will have to structure the purchase carefully to avoid problems. Take advice from an experienced visa specialist.

If you're living together but aren't in a formally documented relationship, each of you would need to make your own €500,000 investment, totalling €1,000,000, to both qualify for Golden Visas. This program is a practical option for British citizens looking to invest in Spain, offering both the chance to live there and the freedom to travel around most of Europe.

Alternatively, for investors interested in the Spanish Golden Visa but who don’t wish to purchase real estate, there are several other qualifying investment options:
  1. Capital Investment: Investing a minimum of €1 million in shares of Spanish companies or bank deposits in Spanish financial institutions.
  2. Government Bonds: A minimum investment of €2 million in Spanish government bonds.
  3. Business Projects: Investing in a business project that is considered of public interest in Spain. This could be based on its potential to create jobs, its contribution to scientific or technological innovation, or its socio-economic impact on the local area.
Each of these investment routes comes with its own set of criteria and benefits, similar to the real estate investment option, providing flexibility for investors with different interests and financial strategies.

Non-Lucrative Visa: For a Relaxed Lifestyle

The Non-Lucrative Visa is an appealing option for those who wish to enjoy the Spanish lifestyle without the commitment of a large investment. Ideal for retirees or individuals with a steady passive income, this visa allows you to reside in Spain provided you can prove sufficient funds to support yourself and any dependents.

This means having a reliable income from pensions, rental properties, investments, or any other sources outside of Spain. The key here is demonstrating that you can live comfortably without taking up employment in the country.

One of the attractive aspects of the Non-Lucrative Visa is its simplicity and the door it opens to the rich cultural and scenic beauty of Spain. Applicants need to show they have enough annual income to meet the minimum financial requirements set by the Spanish government, which is generally around 400% of the IPREM (Public Indicator of Multiple Effects Income) for the main applicant and an additional 100% for each dependent. This visa is initially granted for one year and can be renewed for two subsequent periods of two years each, provided the financial requirements continue to be met.

However, it's important to note that holders of the Non-Lucrative Visa are not allowed to engage in any professional activity or employment in Spain. This includes remote work for companies based outside of Spain, a point that applicants should carefully consider. The focus of this visa is on enjoying the Spanish way of life, exploring its diverse regions, and immersing in the local culture and language, making it an excellent choice for those looking to retire or simply take a prolonged break in a beautiful setting.

Digital Nomad Visa: Work Remotely in Mallorca

The Digital Nomad Visa represents a modern solution for the growing trend of remote work, catering specifically to those who can perform their job from anywhere in the world. Spain's introduction of this visa is a nod to the changing work landscape and offers a fantastic opportunity for digital nomads to base themselves in the scenic environs of Mallorca or elsewhere in Spain.

To qualify, applicants must be employed by a company outside of Spain or be self-employed with clients predominantly located outside of Spain.

This visa is not just about the work; it's about blending the professional with the personal, offering a balance of work, leisure, and cultural immersion.

Applicants need to demonstrate a stable income sufficient to support their stay, with the added requirement of having a portion of their income derived from clients or companies outside of Spain, ensuring that the Spanish labour market remains unaffected.

The Digital Nomad Visa is usually issued for one year and can be renewed for longer periods, assuming the holder continues to meet the criteria. It's a perfect fit for those who love to travel and seek inspiration from new cultures and environments while staying connected to their global clientele or company.

Mallorca, with its vibrant towns, serene landscapes, and dynamic expat community, provides an idyllic backdrop for digital nomads looking to combine productivity with the Mediterranean lifestyle.

For all visas, it's crucial to navigate the application process with careful planning and obtain assistance from a visa specialist to ensure all requirements are met and to smooth out any potential hurdles.

Each visa offers a unique pathway to experiencing life in Spain, catering to different lifestyles and priorities, from peaceful retirement to dynamic remote working scenarios.

Owning Property In Mallorca

One thing that has changed post Brexit is that if you are a non-EU person looking for that idyllic, romantic finca, you will need to obtain Spanish Military Permission for your property purchase if it is on rural land.

This law dates from 1975 is for "real estate restricted access areas" and applies to non-EU citizens.

If you're buying property in urban areas like Palma, or in residential zones with modern villas and apartments, you're in the clear and will not require it. It's designed for purchases on rural, like country homes, farmhouses, and countryside plots. And it can get complicated (in a typically Mallorquin way)– a friend of ours lives in S’Arraco in a beautiful old house – half his property is on urban land and half on rural land. So who knows where that will leave any buyer of his house if he sells it.

The time it takes to get this permission varies. For smaller plots under 2,000m², the application is handled in Barcelona and usually takes about 4 weeks. For larger plots over 2,000m², it goes through Madrid and can take up to 4 months. These times can change depending on the workload of the processing teams, so it's smart to start early.

Without this permission, the Land Registry won't record your purchase, and you won't be able to complete the Deed of Purchase at the notary. If you don't have the permission within 18 months, the purchase could be void. It's crucial to factor in this step when planning your purchase of rural property in Mallorca.

It's worth noting that discussions might lead to changes in this law, especially to make things easier for UK citizens post-Brexit, similar to arrangements with Swiss and Norwegian buyers.

Taxes After Brexit

There have been some tax changes for UK nationals in Spain, so it's important to understand these, especially if you're planning to become a resident.

If you are a company owner in the UK, but tax resident in Mallorca, you can pay yourself dividends free of tax in the UK and pay a moderate 20% in Mallorca. .

The well-publicised "Beckham" Law still offers attractive benefits if your circumstances are appropriate but, understanding the full spectrum of tax implications is essential for effective financial planning in this post-Brexit era, and advice should be sought from reputable tax advisors before structuring your affairs.

Conclusion

In conclusion, the allure of Mallorca remains strong for UK nationals post Brexit, with multiple pathways to property ownership and residency.

Whether through the Golden Visa, the Non-Lucrative Visa, or the Digital Nomad Visa, there are viable options for those looking to call this island home. As the landscape evolves, seeking professional guidance ensures a smooth journey to your Mallorquin dream.

If you would like to discuss how we can help you make your dream of living in Mallorca a reality, just click here to arrange a consultation.