Buying costs and taxes

The costs at a glance

On top of the price you pay a purchase tax, which is by far the biggest item, plus notary and land-registry fees, your own advisers and, if you borrow, a few mortgage costs. Which purchase tax applies depends on the type of sale. A resale home (sold by a private owner, or a used home sold again) pays transfer tax. A new home sold for the first time by a developer pays VAT plus stamp duty instead. The Spanish tax office explains the split on its page IVA or ITP when you buy a home.

Transfer tax (ITP) on resale homes

Transfer tax, ITP (impuesto sobre transmisiones patrimoniales), is a regional tax paid by the buyer. In Mallorca the rates are set by the Balearic tax law (Legislative Decree 1/2014, article 10) and the tax is paid to the ATIB, the Balearic tax agency. Each slice of the value is taxed at its own rate, so only the part above €400,000 pays 9%, and so on.

Worked examples: a €500,000 home pays €41,000 (€32,000 plus 9% of €100,000) and a €1.5 million home pays €150,000. The law turns the scale result into an average rate rounded to two decimals and charges that rate, so some figures come out slightly lower: a €600,000 home pays €49,980 (8.33%) and a €3 million home pays €339,900 (11.33%). The average rate is worked out on the value of the whole property and then applied to each buyer’s share, so buying in two names does not move you into a lower band.

The tax base is the property’s reference value (valor de referencia), or the price or declared value if either is higher (rule introduced by Law 11/2021). The Spanish cadastre (Catastro) sets reference values each year from the prices notaries report in real sales, and you can look a property’s value up on the Catastro’s online office. Where a property has no reference value, the base is the highest of the declared value, the price and the market value. If you think the reference value is too high, you can challenge it only by asking the ATIB to correct your own return or by appealing an assessment, and the Catastro then reports on the value. In February 2026 the Constitutional Court rejected a challenge to these rules (judgment 13/2026), so they still apply.

Lower transfer tax for a main home

The Balearic Islands charge less ITP in some cases where the home becomes the buyer’s habitual residence (main home) and its value is modest. The reliefs use the Spanish income-tax definition: broadly, a home you move into within 12 months of buying and live in continuously for at least three years, with some exceptions. Most of these reliefs depend on that, so a holiday home does not qualify for them. Balearic Law 4/2026 of 11 June 2026, in force since 14 June 2026, changed several of them and raised the value limit for Mallorca.

The condition about owning another home refers to any other home, and the law does not limit it to homes in Spain. Ask your lawyer how a home you own abroad is treated before you count on any of these reliefs, and see Moving to Mallorca for residency.

New builds: VAT and stamp duty

When a developer sells a finished home for the first time, the sale pays VAT (IVA) instead of transfer tax. The rate is 10% for homes, including up to two parking spaces and annexes such as a storage room in the same building sold with them, and 4% for officially protected homes under the special regime or built by a public body. You pay the VAT to the developer, who passes it to the tax office. A national decree-law that still needs a vote in Congress would also apply 4% to some other protected homes from 1 December 2026: see the last section.

The deed for a VAT sale also pays Balearic stamp duty, AJD (impuesto sobre actos jurídicos documentados), on the value in the deed, which cannot be lower than the reference value. You pay it to the ATIB on form 600 within one month, just as you would pay ITP on a resale.

Example: a €600,000 new apartment pays €60,000 VAT plus €9,000 AJD, €69,000 in total. A resale home at the same price pays €49,980 ITP.

Notary, land registry and advisers

The notary is a neutral public official who checks identities and paperwork, reads the deed (escritura) with both sides and authorises the signing. Notary fees are set by a national tariff (Royal Decree 1426/1989): the fee for a sale deed follows a sliding scale that falls as a share of the price, and only for the part of the value above €6,010,121.04 is the fee agreed freely. Copies and extra pages are charged on top.

By default the seller pays for granting the deed and the buyer pays for the first copy and everything after the sale (Civil Code, article 1455). The private contract can change this, so read its costs clause before you sign.

Registering the deed at the land registry (Registro de la Propiedad) is what protects your ownership against third parties. The registry tariff (Royal Decree 1427/1989) is also national. Its main fee, for recording the purchase of each registered property, cannot exceed €2,181.67. A few smaller items, such as the filing entry and certificates, are charged separately.

• Your lawyer: fees are agreed with you. Ask for a written quote that says what is included. See Choosing a lawyer.
• Gestoría: an administrative agency that files tax forms and handles registration. Its fee is agreed in advance; some lawyers do this work themselves.
• Estate agent: the commission is set in the agency agreement and is paid by whoever signed it. Before you view, ask whether the agent expects a fee from you, and agree any fee in writing.
• Translation and powers of attorney: you may need an interpreter at the notary if you do not understand Spanish, and a notarised power of attorney if someone signs for you.
• Your NIE, the foreigner’s tax identity number: the land registry will not register a deed that lacks the tax numbers of everyone signing. See How to get a NIE number.
• Bank charges for international transfers and currency exchange.

Escritura

The public deed of sale, signed before a notary.

Notario

A notary: a neutral public official who authorises the deed. Not your personal adviser.

Registro de la Propiedad

The land registry, which records who owns a property and any charges on it.

Gestoría

An administrative agency that files forms and handles paperwork such as registration.

Valor de referencia

The Catastro’s official reference value, the minimum base for transfer tax and stamp duty.

Mortgage costs: who pays what

If you borrow as an individual against a home, the Real Estate Credit Law (Law 5/2019, in force since 16 June 2019) decides who pays the set-up costs of the loan. Since 10 November 2018 the bank has also been the taxpayer for the stamp duty on the mortgage deed (Royal Decree-law 17/2018). Your own purchase tax is unchanged.

Banks may also charge a single opening fee. It must be shown in the documents the bank gives you at least ten days before signing, including the binding offer (FEIN). Loan-to-value, documents and timings are covered in Mortgages for non-residents.

Buying from a non-resident seller

When the seller is not tax resident in Spain, the buyer has to collect part of the seller’s tax, whether the buyer is resident or not.

1. 1

   Withhold 3% of the price

   At signing you keep back 3% of the agreed price. It is a payment on account of the seller’s tax on any gain. If only some of the sellers are non-resident, the 3% applies only to their share of the price.

2. 2

   Pay it on form 211 within one month

   You pay the 3% to the Spanish tax office (Agencia Tributaria) on form 211, one form per property, within one month of the sale. You give the seller their copy, which they use to count the payment in their own tax return on the sale.

3. 3

   Deal with the municipal plusvalía

   The plusvalía is the town hall’s tax on the rise in land value. It is the seller’s tax, but when the seller is a non-resident individual the buyer becomes liable for it as substitute taxpayer. It must be declared within 30 working days of the sale, so ask your lawyer how the amount will be covered, for example by keeping it back from the price.

Deadlines and forms after signing

1. 1

   Within one month: purchase tax

   Transfer tax (resale) or stamp duty (new build) is self-assessed and paid to the ATIB on form 600 within one month of the deed. You are the taxpayer, even if your lawyer or a gestoría files it for you.

2. 2

   Within one month: 3% retention

   If the seller is non-resident, form 211 and the 3% go to the Agencia Tributaria within one month of the sale.

3. 3

   Within 30 working days: plusvalía

   The seller must declare the municipal plusvalía within 30 working days, and the law also requires the buyer to notify the town hall of the sale within the same period. If the seller is a non-resident individual, you declare the tax yourself as substitute taxpayer. Where the town hall uses self-assessment, as Palma does, the tax is also paid within that time. The registry will not register the deed until the plusvalía has been declared or the sale notified.

4. 4

   After the tax is paid: registration

   The deed and proof of tax payment go to the land registry. Registration completes your protection as owner.

5. 5

   Afterwards: running costs

   Put the IBI property tax, community fees and utilities in your name. See Taxes for owners.

Recent and proposed changes

• In force since 8 October 2026 but still needing a validation vote, which falls to the Congress standing committee (Diputación Permanente) because Parliament was dissolved on 6 October 2026: national Royal Decree-law 29/2026 of 6 October. Congress overturned an almost identical decree-law (26/2026) on 2 October 2026, and as of 25 October 2026 the BOE had published no vote on the new one. It does not change ITP, AJD or the 10% VAT on new homes. From 1 December 2026 it would extend the 4% VAT rate to protected homes with permanent protected status sold by their developer, and it changes the existing IBI surcharge on long-empty homes and lets town halls in officially declared stressed housing areas add an IBI surcharge on homes used for tourist lets; no such area had been declared in the Balearic Islands by October 2026. See Taxes for owners.
• Proposal only: in the general policy debate on 20 October 2026 the Balearic president announced plans to cut purchase taxes on a first home for young and disabled buyers, and on 23 October the Balearic Parliament admitted motions asking the government to do so. The Partido Popular group’s motion asks for no ITP or AJD for under-36s and disabled buyers and half the tax for buyers aged 36 to 40. Announcements and motions are not law, and no bill making these changes had been published.
• In force since 14 June 2026: Balearic Law 4/2026 of 11 June (published 13 June 2026) changed the family reliefs, cut the stamp duty rate for a first main home from 1.2% to 1%, added a 0.5% rate and a 100% stamp duty relief for some young and disabled buyers, and created 50% reliefs for price-limited homes.
• In force since 14 June 2026: Law 4/2026 set a floor of €331,859.70 for the island value limits, and Order 13/2026 (published 25 June 2026) applies it to Mallorca. Order 5/2026 (published 17 March 2026) had raised the Mallorca limit from €270,151.20 to €307,089 with effect from 1 March 2026.
• Court ruling of 12 February 2026: the Constitutional Court upheld the rules that make the Catastro reference value the minimum base for transfer tax and stamp duty (judgment 13/2026, published in the BOE on 19 March 2026).
• In force since 25 July 2025 (Balearic budget Law 6/2025): a 99% relief from ITP and AJD on farmland bought by professional farmers, with strict conditions such as keeping the land in farming for five years.
• In force since 1 January 2023 (Balearic Law 11/2022): the 2% stamp duty rate on property worth €1 million or more. Since 1 January 2024 it no longer applies to mortgages and other security rights.
• No special rate for non-resident buyers: the Balearic tax law, as consolidated on 13 June 2026, charges residents and non-residents the same ITP and AJD rates. As of October 2026 the BOE lists no later amendment to that law, and none of the Balearic laws or decree-laws passed since then changes these taxes.
• Lapsed proposal: a national 100% tax on homes bought by people and companies resident outside the EU, which would have included buyers living in the UK or US. As drafted it would not have covered sales that carry VAT, such as most new builds bought from developers. Announced in January 2025, it was registered by the Socialist group in Congress on 22 May 2025 (bill 122/000196, published 30 May 2025). It was never debated, and it lapsed when Parliament was dissolved on 6 October 2026 for the general election of 29 November 2026. It is not law.

Questions buyers ask