Cost of Buying Property in Mallorca — Taxes, Fees and Hidden Items

Headline price is rarely the full price. Spanish property acquisition carries meaningful frictional costs that need to be modeled into any underwriting, and ongoing taxes that need to be planned for. This piece itemizes both — what it actually costs to buy a property in Mallorca, and what it costs to hold one.

ITP — transfer tax on resale property

The biggest single acquisition cost. ITP (Impuesto sobre Transmisiones Patrimoniales) is the Spanish equivalent of stamp duty, levied on resale (used) property. In the Balearic Islands the rate is a sliding scale:

• Up to €400,000 — 8%
• €400,000 to €600,000 — 9%
• €600,000 to €1,000,000 — 10%
• €1,000,000 to €2,000,000 — 12%
• Above €2,000,000 — 13%

VAT and AJD — for new-build property only

If you are buying a brand-new property directly from a developer, ITP does not apply. Instead you pay 10% VAT plus 1.5% AJD (Actos Jurídicos Documentados). Total: 11.5%. For most foreign Mallorca buyers, this is irrelevant — the vast majority of acquisitions are resale.

Notary and registry fees

Spanish property transfers must be signed before a notary, who verifies title and identities. The notary then lodges the deed with the Land Registry (Registro de la Propiedad). Combined, these fees run roughly 0.5% to 1% of price. They are regulated and don't vary materially between providers.

Legal fees

Most foreign buyers engage a Spanish lawyer to handle due diligence, contract review, and the closing. Standard fees are roughly 1% of price for a single-asset acquisition, sometimes negotiated lower for very high-value transactions. This is money well spent — the due diligence finds things that a casual purchase would miss.

Total acquisition friction

Pulling it all together, a foreign buyer acquiring resale property in Mallorca should budget roughly 10% to 13% of purchase price for acquisition-side frictional costs:

• €800k property — ~€95k friction (ITP €72k + others)
• €2M property — ~€260k friction (ITP €212k + others)
• €5M property — ~€700k friction (ITP €625k + others)

Ongoing costs — what foreign owners pay

Holding costs are typically lower than acquisition friction but recurring:

• IBI (municipal property tax) — roughly 0.4% to 1.1% of cadastral value (usually well below market).
• Basura (refuse) and municipal fees — modest, a few hundred euros annually.
• Non-resident income tax — on imputed rental income (~24% of imputed base) or actual rental income (19% EU / 24% non-EU).
• Wealth tax — applies in Baleares above €700k net Spanish assets, progressive 0.28% to 3.45%.
• Community fees — for properties in shared estates, varies.

Exit costs

On disposal, non-resident sellers pay 19% capital gains tax on the gain (sale price minus adjusted cost basis). The buyer is required to withhold 3% of the sale price and remit it to the Spanish tax authority as a payment on account; the seller reconciles the actual liability separately. Brokerage commissions in Mallorca run typically 3% to 5% plus VAT, paid by the seller.

Frequently asked questions