How to buy
Buying property on Formentera island, Spain
It is very important to know something about the island of Formentera when considering purchasing property in Formentera.
It helps having some local knowledge and having visited several times and in different months through the year.
The summer months can be quite different to the winter months. Although the island has a favourable climate year-long, once the holiday season finishes at the end of October, many shops, bars, restaurants and services close and Formentera changes in character.
Formentera has very little land that can be bought and built on. It has a population around 8,000, and there are only 2,000 registered houses, this coupled with the fact that it is such a beautiful and tranquil place creates high demand for property. Most of the island is declared as National Park.
Many homes are also locally owned and do not come on the market. Much of the property for sale on the island is German or French owned, although people of many different nationalities including increasing numbers of mainland Spaniards now seek property for investment in Formentera.
There are restrictions on the style and design of buildings should land be acquired, and land owned on the coast can now not be built on due to building regulations.
These factors have preserved the islands natural charm, and made it an incredibly desirable place both to live and to holiday.
The quality of property on Formentera is very high for all these reasons and there are no over sized modern ‘estate’ developments or over-urbanised areas.
Every house has its own unique history and character.
It helps having some local knowledge and having visited several times and in different months through the year.
The summer months can be quite different to the winter months. Although the island has a favourable climate year-long, once the holiday season finishes at the end of October, many shops, bars, restaurants and services close and Formentera changes in character.
Formentera has very little land that can be bought and built on. It has a population around 8,000, and there are only 2,000 registered houses, this coupled with the fact that it is such a beautiful and tranquil place creates high demand for property. Most of the island is declared as National Park.
Many homes are also locally owned and do not come on the market. Much of the property for sale on the island is German or French owned, although people of many different nationalities including increasing numbers of mainland Spaniards now seek property for investment in Formentera.
There are restrictions on the style and design of buildings should land be acquired, and land owned on the coast can now not be built on due to building regulations.
These factors have preserved the islands natural charm, and made it an incredibly desirable place both to live and to holiday.
The quality of property on Formentera is very high for all these reasons and there are no over sized modern ‘estate’ developments or over-urbanised areas.
Every house has its own unique history and character.
Formentera investment property - more factors to consider
There are a number of other factors to consider when buying property in Formentera including the following:-
>Some homes have cisterns as a water source, and these may need refilling during periods of low rainfall.
>Some homes have natural water wells or 'pozos', which may be slightly salinated, or may dry up in periods of very low rainfall.
>Some homes have no grid-electricity and rely on solar power or generators.
>Access roads can sometimes pose problems for some vehicles.
All properties have the potential to be let during the summer season. There is especially high demand in the months of July and August.
Rental incomes can vary from between €5000 to €30,000 depending on the specification of the property.
>Some homes have cisterns as a water source, and these may need refilling during periods of low rainfall.
>Some homes have natural water wells or 'pozos', which may be slightly salinated, or may dry up in periods of very low rainfall.
>Some homes have no grid-electricity and rely on solar power or generators.
>Access roads can sometimes pose problems for some vehicles.
All properties have the potential to be let during the summer season. There is especially high demand in the months of July and August.
Rental incomes can vary from between €5000 to €30,000 depending on the specification of the property.
The property buying process in Formentera
After choosing a property - an option to buy contract is drawn up. This is a contract made at the beginning of the property buying process which includes the outlay by both parties of a 10% deposit. Due to the relatively high price of property in Formentera, this amount can be negotiated to 5%.
The document includes a description of the buyer and seller, passport numbers, NIF or NIE numbers, status as either a business venture, private purchase or as married couple.
A date for completion is agreed by both parties usually some weeks ahead. It is important that any costs or loans secured against the property are made known and cleared up so that it is free from such costs or debts. If either party wishes to withdraw from the sale after this point the deposit is normally lost plus interest. This does however avoid ‘gazumping’ or speculation.
It is important to bear in mind that all properties are subject to 7% property purchase tax on the day of purchase. There is also a registration fee of the new property and a notary (solicitors) fee for the preparation of deeds and documents. Allow € 5000 for these extra costs as a guide, but we can help you in understanding this process.
This is like a national identification number and all parties must have a NIF or NIE one of these before signing the option to buy contract.
This can be obtained from the ‘Gestoria’ who will apply for your NIF or NIE number locally for a fee of about € 300.
This should be the first thing you do when you start looking for a house. It costs approximately € 150/ person if you do this independently.
In terms of finance and mortgaging, a bank will typically provide a resident or non-UK resident with up to 80% mortgage over 25 years or over, providing monthly payments can be met. The Euro interest rate is typically lower than that of the UK.
Life insurance and property insurance is included in the monthly mortgage repayment.
The document includes a description of the buyer and seller, passport numbers, NIF or NIE numbers, status as either a business venture, private purchase or as married couple.
A date for completion is agreed by both parties usually some weeks ahead. It is important that any costs or loans secured against the property are made known and cleared up so that it is free from such costs or debts. If either party wishes to withdraw from the sale after this point the deposit is normally lost plus interest. This does however avoid ‘gazumping’ or speculation.
It is important to bear in mind that all properties are subject to 7% property purchase tax on the day of purchase. There is also a registration fee of the new property and a notary (solicitors) fee for the preparation of deeds and documents. Allow € 5000 for these extra costs as a guide, but we can help you in understanding this process.
This is like a national identification number and all parties must have a NIF or NIE one of these before signing the option to buy contract.
This can be obtained from the ‘Gestoria’ who will apply for your NIF or NIE number locally for a fee of about € 300.
This should be the first thing you do when you start looking for a house. It costs approximately € 150/ person if you do this independently.
In terms of finance and mortgaging, a bank will typically provide a resident or non-UK resident with up to 80% mortgage over 25 years or over, providing monthly payments can be met. The Euro interest rate is typically lower than that of the UK.
Life insurance and property insurance is included in the monthly mortgage repayment.
Our property seek and consult services
> Understand your requirements and preferred locations.
>Collate details of suitable sale property in Formentera and present this to you with photos, title deeds, building permissions (if applicable), location maps and other relevant and important information that you will need in order to make an informed decision about buying property in Formentera.
>Help arrange flights, accommodation and transfers to Formentera island for a viewing trip of properties.
>Meet you on the island and arrange property viewings and show you around your preferred properties.
>Advise you in areas of technical and legal importance which you may previously not have considered.
>Provide you with local information and advice.
>Help and advise you with pre-contractual details about buying property in Spain and the Balearic islands.
>Arrange meetings with a gestor, the local notary and a lawyer - should you chose to use one.
>We work with several financial institutions and can introduce you to a local bank managers or financial decision makers.
>If you wish to have reform work undertaken on a property, we offer advice and can help suggest how you work with local planners in order to progress your project.
>Attend the signing of documentation with you including the 'Option to buy contract' or 'Pre-contract'.
>Guide you through the property purchase process in a secure and legal way.
We are very proud of our long history of integrity in having helped thousands of people discover the beautiful Spanish, Balearic island of Formentera.
Our focus is on relationships and how we can work in our clients' interests in helping them to realise the ownership a dream property in Formentera.
>Collate details of suitable sale property in Formentera and present this to you with photos, title deeds, building permissions (if applicable), location maps and other relevant and important information that you will need in order to make an informed decision about buying property in Formentera.
>Help arrange flights, accommodation and transfers to Formentera island for a viewing trip of properties.
>Meet you on the island and arrange property viewings and show you around your preferred properties.
>Advise you in areas of technical and legal importance which you may previously not have considered.
>Provide you with local information and advice.
>Help and advise you with pre-contractual details about buying property in Spain and the Balearic islands.
>Arrange meetings with a gestor, the local notary and a lawyer - should you chose to use one.
>We work with several financial institutions and can introduce you to a local bank managers or financial decision makers.
>If you wish to have reform work undertaken on a property, we offer advice and can help suggest how you work with local planners in order to progress your project.
>Attend the signing of documentation with you including the 'Option to buy contract' or 'Pre-contract'.
>Guide you through the property purchase process in a secure and legal way.
We are very proud of our long history of integrity in having helped thousands of people discover the beautiful Spanish, Balearic island of Formentera.
Our focus is on relationships and how we can work in our clients' interests in helping them to realise the ownership a dream property in Formentera.
