Taxes When Buying a Property in Mallorca: A Clear Guide for Buyers
If you are thinking about buying a house or apartment in the Balearic Islands, it’s important to understand exactly what taxes you will pay when purchasing a property. Below, we summarise the key taxes (depending on whether it’s a new build or a resale), practical examples, and the main available deductions. Working with a gestoría in Palma de Mallorca or a tax advisor in Palma de Mallorca can help you optimise the total cost and avoid mistakes.
1) New build property
- VAT: generally 10% of the purchase price (for subsidised housing in special regime or public promotion: 4%).
- Stamp Duty (IAJD – Actos Jurídicos Documentados): a variable rate charged on the notarised deed of sale. In the Balearic Islands, the standard rate applied in practice is 1.5% (specific cases may have different rates).
Official reference: ATIB (form 600 – code DN4) indicates a 1.5% rate for deeds of sale subject to VAT.
2) Resale property
Purchasing a resale property in the Balearic Islands is subject to Transfer Tax (ITP) with progressive rates applied to the deeded or market value (whichever is higher):
- Up to €400,000: 8%
- €400,000.01 – €600,000: 9%
- €600,000.01 – €1,000,000: 10%
- €1,000,000.01 – €2,000,000: 12%
- Over €2,000,000: 13%
Official source for Balearic ITP brackets: ATIB.
What about Stamp Duty on resale properties?
The deed of sale for a resale property (subject to ITP) generally does not incur the variable rate of Stamp Duty. Stamp Duty does apply to the mortgage deed if you finance the purchase, with a standard rate of 1.5% on the mortgage liability in the Balearic Islands.
Reduced ITP rates and deductions (subject to requirements)
- 4% if it’s a primary residence ≤ €270,151.20 and you do not own another property.
- 2% for buyers under 36 years old, people with disabilities, large families or single-parent families (meeting the conditions).
- €400,000 at 8% → €32,000
- €100,000 at 9% → €9,000
Total ITP: €41,000
3) Tax summary by property type
| Property type | Tax | Indicative rate |
|---|---|---|
| New build | VAT | 10% (4% special regime/public promotion) |
| New build | Stamp Duty (deed) | Approx. 1.5% (Balearic Islands) |
| Resale | ITP (progressive) | 8% – 13% by brackets |
| Any property (if mortgaged) | Stamp Duty (mortgage deed) | Approx. 1.5% (Balearic Islands) |
4) Other common expenses (not taxes)
- Notary and Land Registry fees.
- Mortgage arrangement fees (if financing), valuation costs and bank charges.
- Professional fees if you hire a gestoría in Palma de Mallorca to handle the purchase and taxes.
FAQ
What is the ITP in Mallorca? It’s progressive: 8% (up to €400,000), 9% (€400,000.01–€600,000), 10% (€600,000.01–€1,000,000), 12% (€1,000,000.01–€2,000,000) and 13% (> €2,000,000). Reduced rates and deductions apply if you meet certain requirements.
Conclusion
In the Balearic Islands, the tax cost of buying a property depends on whether it’s new (VAT + Stamp Duty (Actos jurídicos documentados)) or resale (progressive ITP). If you finance with a mortgage, the loan deed also pays Stamp Duty. To budget accurately and take advantage of deductions, it’s highly recommended to work with a gestoría in Palma de Mallorca or a tax advisor in Palma de Mallorca experienced in real estate transactions.
Taxes When Buying a Property in Mallorca: A Clear Guide for Buyers
If you are thinking about buying a house or apartment in the Balearic Islands, it’s important to understand exactly what taxes you will pay when purchasing a property. Below, we summarise the key taxes (depending on whether it’s a new build or a resale), practical examples, and the main available deductions. Working with a gestoría in Palma de Mallorca or a tax advisor in Palma de Mallorca can help you optimise the total cost and avoid mistakes.
1) New build property
- VAT: generally 10% of the purchase price (for subsidised housing in special regime or public promotion: 4%).
- Stamp Duty (IAJD – Actos Jurídicos Documentados): a variable rate charged on the notarised deed of sale. In the Balearic Islands, the standard rate applied in practice is 1.5% (specific cases may have different rates).
Official reference: ATIB (form 600 – code DN4) indicates a 1.5% rate for deeds of sale subject to VAT.
2) Resale property
Purchasing a resale property in the Balearic Islands is subject to Transfer Tax (ITP) with progressive rates applied to the deeded or market value (whichever is higher):
- Up to €400,000: 8%
- €400,000.01 – €600,000: 9%
- €600,000.01 – €1,000,000: 10%
- €1,000,000.01 – €2,000,000: 12%
- Over €2,000,000: 13%
Official source for Balearic ITP brackets: ATIB.
What about Stamp Duty on resale properties?
The deed of sale for a resale property (subject to ITP) generally does not incur the variable rate of Stamp Duty. Stamp Duty does apply to the mortgage deed if you finance the purchase, with a standard rate of 1.5% on the mortgage liability in the Balearic Islands.
Reduced ITP rates and deductions (subject to requirements)
- 4% if it’s a primary residence ≤ €270,151.20 and you do not own another property.
- 2% for buyers under 36 years old, people with disabilities, large families or single-parent families (meeting the conditions).
- €400,000 at 8% → €32,000
- €100,000 at 9% → €9,000
Total ITP: €41,000
3) Tax summary by property type
| Property type | Tax | Indicative rate |
|---|---|---|
| New build | VAT | 10% (4% special regime/public promotion) |
| New build | Stamp Duty (deed) | Approx. 1.5% (Balearic Islands) |
| Resale | ITP (progressive) | 8% – 13% by brackets |
| Any property (if mortgaged) | Stamp Duty (mortgage deed) | Approx. 1.5% (Balearic Islands) |
4) Other common expenses (not taxes)
- Notary and Land Registry fees.
- Mortgage arrangement fees (if financing), valuation costs and bank charges.
- Professional fees if you hire a gestoría in Palma de Mallorca to handle the purchase and taxes.
FAQ
What is the ITP in Mallorca? It’s progressive: 8% (up to €400,000), 9% (€400,000.01–€600,000), 10% (€600,000.01–€1,000,000), 12% (€1,000,000.01–€2,000,000) and 13% (> €2,000,000). Reduced rates and deductions apply if you meet certain requirements.
Conclusion
In the Balearic Islands, the tax cost of buying a property depends on whether it’s new (VAT + Stamp Duty (Actos jurídicos documentados)) or resale (progressive ITP). If you finance with a mortgage, the loan deed also pays Stamp Duty. To budget accurately and take advantage of deductions, it’s highly recommended to work with a gestoría in Palma de Mallorca or a tax advisor in Palma de Mallorca experienced in real estate transactions.
Gestoría en Palma de Mallorca.
Si buscas una gestoría cerca de ti, asesoramos a empresas en el ámbito laboral, fiscal y contable. También somos una gestoría administrativa en Palma y realizamos traspasos de vehículos.
