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Plattes is Dilpl.-Kfm. tax auditor and partner and administrator of European Accounting
What is Fundamente Mallorca and what services does it offer to German-speakers settling in Mallorca?
This is an initiative to offer good information, solid advice and other services to German-speaking purchasers and owners of properties in the Balearic Islands. This target audience includes both residents and non-residents, since many German, Austrian and Swiss citizens have vacation homes or apartments here. They share one problem. They are lacking reliable information about important topics.
What aspects must a German citizen consider when deciding to establish residence or locate their investments on the island?
It can also be summarized this way. In the beginning, they may be too trusting, and after their first bad experiences, they distrust everyone. Also, many are not aware how differently things work. This is certainly not only in the area of laws or taxes, but also in construction techniques, for example. Our main recommendation is to seek the type of advice that is justly the product of Fundamente Mallorca. This is a mix between general and specifically regional information. For example, the technician who handles a problem with humidity in the walls must not only have expert skills, but also know the particularities both of the climate of Mallorca and of the customary construction techniques in the island. The foreign owner needs more support, beginning with less knowledge about practically everything related to the region, and lacking a social environment to advise, counsel and faithfully recommend people or companies that really work.
What is your role in the organization and what are its challenges for 2015?
I am a partner and administrator of European Accounting, a tax advisory company working for more than 15 years almost exclusively with foreign residents on the island. Through my very close relationships with many clients, I learn of every type of problem, not only tax issues. I came to some conclusions and proposed to five companies of recognized prestige, including Bufete Buades, to be part of the “hard core” of Fundamente Mallorca. I promoted the project with my team and this team provides the necessary support. Our greatest challenge in the beginning was positioning ourselves as a partner of reference to German-speaking owners.
The year has just begun, bringing new legislative and tax changes. Which of these can most directly affect new foreign residents in Baleares?
Without a doubt, it is the reform of the rent law, because it directly affects taxation on transfer of properties. In this case, however, veteran owners are the most affected. According to the circumstances, taxation can be reduced a bit or peak dramatically. The latter can occur in the case of the sale of a property purchased before 1994 at a very low price. There are also important variations in the new procedure to substantially modify land registry values through updating coefficients, taking place this year for example in the municipalities of Marratxí, Calvià and Andratx.
Economic indicators seem to show that we are coming out of the crisis. Have you noticed a change in the capacity of investment and generation of economic activity of the German-speaking citizens interested in residing in Mallorca?
In early 2013, we began editing a book directed to the Swiss market, describing the reasons that investors should consider Spain and Mallorca. We surveyed clients about our theory, and no one wanted to know anything about all this. However, by then, the “smart money” had already begun to purchase assets discreetly in Spain. Just when the book came out in autumn of that year, the public was already taking note of the first signs of recovery. From then the interest of the investors has boomed. There is a clear and sustained change in trends but only regarding investments. The attitude toward settling in Mallorca is somewhat different. According to some measures such as model 720 and taxes on assets, many of Mallorca’s biggest fans prefer to settle or keep their residences abroad. There is still much to be done. We and our partners look forward to the challenges.