Updated October 2026. Tax rates of the Balearic Islands (Decreto Legislativo 1/2014 as amended up to 2026; wealth tax: Law 12/2023). Please have them confirmed by your lawyer before buying.
Discover all about additional purchase costs, ongoing expenses, and essential post-purchase steps for your property in Mallorca, including expert advice to optimally prepare you for the purchase.
1. Introduction
Welcome to our blog at “Luxury on Mallorca”: your expert in exclusive properties on this paradise island. Acquiring a property is an exciting endeavor that requires careful planning and knowledge. Mallorca offers an impressive variety of properties in stunning locations, but the purchase process can be complex, especially when it comes to associated costs. In this blog post, we aim to provide you with a comprehensive overview of all expenses related to purchasing a property in Mallorca. Our goal is to offer you valuable insights and information to make an informed buying decision.
In addition to the purchase price, there are numerous additional costs and taxes that are often overlooked but can constitute a significant part of your total investment. Furthermore, it is important to be aware of ongoing costs that will be incurred after the purchase. From property taxes to insurance and maintenance, we cover all relevant topics to prepare you thoroughly for acquiring your dream property in Mallorca.
Our objective is to equip you, as a buyer, with the necessary knowledge to make the purchase process as transparent and understandable as possible. Armed with this knowledge, you can avoid unexpected surprises and focus on what truly matters, enjoying your new home on the sunny island of Mallorca. Let’s embark on this journey together and discover what you should consider when buying real estate.
2. Purchase Costs and Taxes When Buying Property in Mallorca (2026)
In addition to the purchase price, buyers in Mallorca pay taxes and fees that are easy to underestimate. Whether you pay transfer tax or VAT depends on whether you buy a resale property or a new build directly from the developer. The rates below are those of the Balearic Islands as of 2026.
Property Transfer Tax (ITP) for resale properties
For resale homes, and for plots bought from a private seller, the Balearic Islands charge property transfer tax (Impuesto sobre Transmisiones Patrimoniales) in brackets. Each rate applies only to the part of the price that falls within its bracket:
- Up to 400,000 EUR: 8%
- 400,000 to 600,000 EUR: 9%
- 600,000 to 1,000,000 EUR: 10%
- 1,000,000 to 2,000,000 EUR: 12%
- Over 2,000,000 EUR: 13%
Reduced rates exist for a first home up to 270,151.20 EUR under certain conditions; they do not apply to most luxury properties.
VAT (IVA) and stamp duty (AJD) for new builds
If you buy a new build directly from the developer, you pay VAT instead of transfer tax, plus stamp duty (Actos Jurídicos Documentados):
- VAT (IVA): 10% for homes (including up to two parking spaces and a storage room bought together with the home), 21% for building plots and commercial premises
- Stamp duty (AJD): 1.5% of the price; 2% if the property is worth 1,000,000 EUR or more; 2.5% in certain business transactions in which the seller waives the VAT exemption
Whether a sale is subject to VAT or to transfer tax depends on the seller (developer or company, or private person). Your lawyer checks this before you sign.
Notary, land registry and administrative agent
Notary and land registry fees follow official scales. Together with the administrative agent (gestoría) who files the taxes and the registration, you should budget about 0.5% to 1% of the purchase price.
Legal fees
We work with experienced lawyers who advise you in your own language and accompany you through the whole purchase. Their fee is usually about 1% to 1.2% of the purchase price, plus 21% VAT.
Other costs
Depending on the case: a valuation (tasación) and the costs of a mortgage if you finance the purchase, sworn translations, and the transfer of electricity and water contracts.
If the seller is not resident in Spain
The buyer must withhold 3% of the purchase price and pay it to the Spanish tax office on account of the seller's taxes (form 211). This is not an extra cost for you, as it is deducted from the amount paid to the seller, but your lawyer must handle it at the notary.
Important notes
- The rates in this guide apply to the Balearic Islands (Mallorca, Menorca, Ibiza and Formentera). Other Spanish regions have different rates.
- Taxes and fees can change. Please have the figures for your purchase confirmed by your lawyer before you sign.
Overall, buyers should plan for additional costs of about 10% to 14% of the purchase price for a resale property (the higher the price, the higher the share), and about 13% to 15% for a new build.
Example: resale property worth 1,000,000 EUR
- Transfer tax (ITP): 400,000 EUR × 8% + 200,000 EUR × 9% + 400,000 EUR × 10% = 90,000 EUR
- Notary, land registry and gestoría (about 1%): 10,000 EUR
- Legal fees: 10,000 EUR + 21% VAT = 12,100 EUR
- Additional costs: 112,100 EUR. Total: 1,112,100 EUR
Example: new build worth 1,000,000 EUR, bought from the developer
- VAT (IVA) 10%: 100,000 EUR
- Stamp duty (AJD) 2%, as the value is 1,000,000 EUR or more: 20,000 EUR
- Notary, land registry and gestoría (about 1%): 10,000 EUR
- Legal fees: 10,000 EUR + 21% VAT = 12,100 EUR
- Additional costs: 142,100 EUR. Total: 1,142,100 EUR
Example: building plot worth 1,000,000 EUR
- Bought from a developer or company: VAT (IVA) 21% = 210,000 EUR, plus stamp duty (AJD) 2% = 20,000 EUR
- Notary, land registry and gestoría (about 1%): 10,000 EUR
- Legal fees: 10,000 EUR + 21% VAT = 12,100 EUR
- Additional costs: 252,100 EUR. Total: 1,252,100 EUR
- Bought from a private seller: transfer tax (ITP) of 90,000 EUR instead of VAT and stamp duty, so a total of 1,112,100 EUR
These examples show the main costs. Individual costs such as a valuation, a mortgage or translations come on top.
3. Ongoing Costs and Taxes After Purchasing Real Estate in Mallorca
Owning a property in Mallorca also brings ongoing costs. This overview helps you plan them realistically:
Property tax (IBI)
Calculated on the cadastral value (valor catastral), which is usually well below the market value. For urban properties the rate is between 0.4% and 1.1%, depending on the municipality. Example: with a cadastral value of 500,000 EUR and a rate of 0.7%, the IBI is 3,500 EUR a year.
Waste collection
A separate municipal fee in most municipalities (in Palma it is charged with the water bill), usually a few hundred euros a year.
Community fees
For apartments and properties in a residential complex: from about 100 EUR a month in smaller buildings, considerably more in complexes with pool, gardens and security.
Insurance
Home insurance usually costs a few hundred euros a year, more for larger villas.
Utilities
Electricity, water, gas, telephone and internet depend on consumption: about 150 to 300 EUR a month for an average home, more for a villa with pool and garden.
Wealth tax (Impuesto sobre el Patrimonio)
Since 2024 the Balearic Islands exempt the first 3,000,000 EUR of net wealth. Non-residents pay wealth tax only on their assets in Spain and can apply the Balearic allowance; residents can additionally exempt up to 300,000 EUR for their main home. Above 3,000,000 EUR of net wealth, the state solidarity tax on large fortunes may also apply. Your tax adviser will check this for you.
Non-resident income tax (IRNR)
- Personal use: an imputed income of 1.1% of the cadastral value (2% if the cadastral value has not been revised recently) is taxed at 19% for residents of the EU and EEA, or 24% for residents of other countries. Example: 500,000 EUR × 1.1% × 19% = 1,045 EUR a year.
- Rental: 19% of the net rental income for residents of the EU and EEA (expenses are deductible), 24% of the gross rental income for residents of other countries.
- If you live in Spain, you pay Spanish income tax (IRPF) instead.
4. Important Steps After Purchasing a Property
After purchasing a property in Mallorca, several essential steps are necessary to ensure the smooth operation and protection of your property:
Registration of Utility Services:
It is important to transfer electricity, water, and other services into your name as soon as possible after the purchase. This includes contacting local utility providers and potentially paying connection fees.
Property Security:
To protect yourself from illegal occupants, known as “okupas,” you should invest in security systems. This includes sturdy doors and locks, alarm systems, and surveillance cameras. Regular visits or hiring a trusted individual to oversee the property are also advisable. Building good relationships with neighbors can also help keep an eye on the property.
Maintenance and Repairs:
Regular maintenance is crucial to maintain the value and safety of your property. Plan for routine inspections of electrical systems, plumbing, the roof, and other critical elements of the property. Additionally, do not neglect the upkeep of outdoor areas such as gardens or pools.
5. Conclusion
These steps are essential to secure and maintain the long-term value and security of your property in Mallorca.
In this blog post, we have summarized important information about the incurred costs and necessary steps after purchasing a property in Mallorca. Our goal is to provide you, as a buyer, with better preparation and a deeper understanding of these processes. Our expertise as real estate agents in Mallorca can assist you in overcoming these challenges. You are welcome to browse our property listings on Luxury on Mallorca. If your desired property is not listed, feel free to contact us, and we will help you find your dream property.
Please note that despite careful research, we cannot assume liability for any errors or changes in costs and taxes. We recommend staying informed about the latest regulations.
