What taxes when buying a property in the Balearics Islands?

Taxes property

In the Balearic Islands, the general tax rate is 10% of the property price. In addition, you must pay the Stamp Duty (IAJD), which is 1.2%.
VAT: 10% (€30,000)
Stamp Duty (IAJD): 1.2% (€3,600)

IMPORTANT NOTE: The information provided is subject to changes in legislation and individual circumstances. Each case will be assessed according to the latest regulations.

If you’re considering buying a property in Mallorca or other parts of the Balearic Islands, it’s essential to understand the taxes and associated costs. Many buyers are surprised to discover that, beyond the property price, there are significant additional expenses.

This guide explains the taxes involved when buying a home, the differences between new and resale properties, the key expenses you should factor in, and how Taylor Wimpey España can help you manage the entire process safely and hassle-free.

Taxes when buying a property in Mallorca

1. Property Transfer Tax (ITP)

This tax applies when purchasing a resale property. It’s calculated based on the sale price using a progressive scale:

• Up to €400,000: 8%

• From €400,001 to €600,000: 9%

• Above €600,000: 10%

Example: For a property priced at €500,000:

• €32,000 (8% of the first €400,000)

• €9,000 (9% of the remaining €100,000)
  Total: €41,000 in ITP

2. Taxes property: VAT and Stamp Duty (IAJD)

If you’re buying a new property directly from the developer (such as those offered by Taylor Wimpey España), ITP doesn’t apply. Instead, you’ll pay:

• 10% VAT

• 1.2% Stamp Duty (IAJD)

Example: For a new property priced at €300,000:

• VAT: €30,000

• IAJD: €3,600
  Total: €33,600

3. Other expenses when buying a property

In addition to taxes, you should also budget for:

• Notary fees: €600–1,000 depending on the property value

• Land registry fees: €400–700

• Gestoría (administration services): Around €300 (optional but recommended)

Residents vs. Non-residents taxes

• Tax residents in Spain: Pay taxes like Spanish citizens and may benefit from incentives such as exemptions for reinvesting in a primary residence.

• Non-residents: Must pay tax on income generated in Spain and appoint a fiscal representative — something the Taylor Wimpey team can help you arrange easily.

Annual taxes for homeowners in Mallorca

Owning a home also means covering recurring taxes:

• IBI (Property Tax): 0.4%–1.1% of the cadastral value

• Waste collection tax: Around €100–200 annually

• Wealth Tax: Applies to high-net-worth individuals, including real estate assets

The legal process of buying a home in Mallorca

With Taylor Wimpey’s support, the process becomes much simpler. The steps include:

1. Reservation contract (Contrato de Arras)
   Initial agreement with the seller and deposit (usually 10%)

2. Legal Due Diligence
   A lawyer reviews the legality of the property: ownership, encumbrances, urban planning compliance, etc.

3. Signing before a notary
   The public deed of sale is signed and taxes are paid.

4. Land Registry
   Official registration secures your legal ownership.

5. Appointing a fiscal representative
   Required for non-residents. We’ll help you comply with this obligation.

Want to avoid surprises?

With Taylor Wimpey España, you’re not just buying a home in a privileged setting like the Balearic Islands — you’re also supported by a team of experts who guide you from day one: taxes, legal matters, banking procedures, insurance, and more.

Find your dream home of  Taylor Wimpey Mallorca in the area.