The British need a Defense permit to buy on rustic land

With Brexit in force, buyers of the second investment market in housing for the Balearic Islands – the first at the state level – are now subject to a new requirement to buy properties on rustic land on the island and the rest of the archipelago. They need a permit from the Ministry of Defense in accordance with a 1975 regulation. This is “anachronistic”, according to Hans Lenz, president of the Balearic National and International Real Estate Association (Abini).

Lenz emphasizes that the British market “is the strongest in Spain”, and in the Balearic Islands the second, with a share of 18%, after the German, with 48% in the real estate sector. For the president of Abini, Law 8/1975 on areas of facilities of interest to National Defense and its regulations “are meaningless today.” The norm protects zones of military protection for strategic interest and that could endanger national security. It affects various areas, such as the Bay of Cádiz, the border with Portugal, areas of the Galician coast, Torrevieja, Ceuta, Melilla or the islands. In the case of Mallorca, it is restricted to rustic land.

The real estate agency Engel & Völkers informs its British clients of the changes that affect them to continue investing in Mallorca. Among them, the Spanish military permit for “restricted access real estate areas for non-EU citizens.”

In practice, it means that a sale and purchase transaction takes longer. What used to take three months, “has now doubled.” The permit can take a month, if the request is directed through Barcelona (for plots of less than 2,000 square meters), or even four months, if it is made from the headquarters of the Ministry in Madrid (for properties that exceed 2,000 square meters ). It is feared that the deadlines will be delayed further as British operations increase.

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Without this authorization, the purchase cannot be registered in the property registry and it is necessary to complete the deed before a notary public. If not received within eighteen months, the purchase will be legally void.

For Lenz, also CEO of Engel & Völkers Mallorca Southwest, it is an outdated law and he believes that it will soon be reviewed and an agreement will be reached between the Spanish and British governments, as has already been done with that of Switzerland and that of Norway. The Russians also need that authorization, but it is a very residual market on the islands.

Golden Visas

Engel & Völkers also informs its customers in the United Kingdom about the Golden Visa, the residence permits that simplify the procedures and can be requested, among other options, for an investment of 500,000 euros in a property free of charges. Lenz explains that the British are using this option “and retroactively.”

He also warns that there is a movement of British people to Portugal and Greece for their more attractive tax regimes, in addition to the case of digital nomads who choose to go to work in Greece.

Regarding the luxury housing market, “very cautiously” points out that the year is starting well.

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