Buying a Property in Mallorca: Taxes, Fees and Costs in 2026
Updated: 2 days ago
Buying a property in Mallorca is an exciting investment, whether you are looking for a permanent residence, a holiday home or a property to complement your investment portfolio. However, the purchase price is only part of the financial commitment.
Understanding the taxes, legal formalities and additional costs involved in a property transaction is essential when planning your budget. The final amount will depend on whether you are buying a resale property or a newly built home, whether you require mortgage financing, and whether you qualify for any applicable tax relief.
In this guide, we explain the main costs of buying property in Mallorca in 2026, helping you approach the process with greater clarity and confidence.
1. What costs should you budget for when buying property in Mallorca?
The total cost of purchasing a property depends on several factors, including the purchase price, the type of property, the applicable tax regime and your financing arrangements.
The main expenses to consider are:
Property Transfer Tax (ITP) on most resale properties.
Value Added Tax (VAT) and Stamp Duty (AJD) on qualifying new-build purchases.
Notary fees for the relevant public deeds.
Land Registry fees.
Valuation fees if you are applying for a mortgage.
Mortgage-related costs and any applicable bank fees.
Legal, tax or administrative services, where required.
Not every expense applies to every transaction. The most effective way to plan your purchase is to calculate the costs specific to the property and your circumstances before signing a reservation agreement or private purchase contract.
2. Property Transfer Tax (ITP) on resale properties
When purchasing a resale property in Mallorca, the buyer will generally pay Spanish Property Transfer Tax, known as Impuesto sobre Transmisiones Patrimoniales (ITP).
In the Balearic Islands, the general ITP rate for property transfers follows a progressive scale.
As of October 2026, the general bands are:
Property value band | General rate for that band |
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% |
These rates apply progressively to the relevant portions of the taxable amount rather than as a single rate across the entire purchase price.
The taxable base must be established under the applicable tax rules. Depending on the circumstances, the cadastral reference value may be relevant, alongside the declared value and other statutory provisions.
Example: purchasing a resale property for €350,000
Assuming the taxable base is €350,000 and the general 8% rate applies:
Purchase price: €350,000
ITP at 8%: €28,000
Total before other purchase costs: €378,000
This is an illustrative calculation. The final tax liability may differ if the taxable base changes or if a reduced rate or tax benefit applies.
Are reduced rates or tax benefits available?
The Balearic Islands provide certain tax benefits for eligible buyers and transactions.
Depending on the circumstances, these may include provisions relating to a primary residence, younger buyers, people with disabilities and certain large or single-parent families.
Eligibility is subject to specific legal conditions, which may include property-value limits, age requirements, income thresholds, ownership restrictions and the intended use of the property.
Changes introduced in June 2026 also affected the thresholds for certain tax benefits. A general reference threshold of €331,859.70 applies to particular benefits in Mallorca and Menorca, but this is not a universal limit for every tax relief scheme.
Before relying on a reduced rate, check the conditions applicable to your individual purchase with the Balearic Islands Tax Agency (ATIB) and review its June 2026 tax update.
3. Taxes on newly built properties: VAT and Stamp Duty
Buying a newly built property directly from a developer usually involves a different tax structure from buying a resale property.
Value Added Tax (VAT)
The general VAT rate on the purchase of a new residential property in Spain is 10%, subject to the applicable legal conditions and any special rules.
For a newly built property priced at €350,000 before taxes:
Purchase price: €350,000
VAT at 10%: €35,000
Total including VAT: €385,000, before other expenses
The applicable treatment should always be confirmed for the specific transaction.
Stamp Duty (AJD)
A qualifying new-build purchase may also be subject to Actos Jurídicos Documentados (AJD), the Spanish stamp duty applicable to certain notarised legal documents.
In the Balearic Islands, the general rate for the variable component of notarial stamp duty is generally 1.5%, subject to the applicable rules, reduced rates and exemptions.
If the taxable base is €350,000 and the general 1.5% rate applies, the AJD would be €5,250.
In this simplified example, the combined VAT and AJD would total €40,250, before notary fees, Land Registry fees and any other expenses.
Certain eligible buyers may qualify for tax benefits. The taxable base, applicable rate and eligibility requirements should be confirmed before completing the transaction.
When comparing a new-build property with a resale home, consider the total acquisition cost rather than the advertised purchase price alone.
4. Notary and Land Registry fees
Spanish property purchases are generally formalised through a public deed executed before a notary. The transaction is then submitted to the relevant Land Registry for registration.
Notary fees
Notary fees are governed by an official tariff and depend on the documents and circumstances involved.
The costs associated with the purchase deed should be distinguished from those related to any mortgage deed. The allocation of notarial expenses depends on the applicable legal rules and the terms of the transaction.
Land Registry fees
The Land Registry records the change of ownership and, where relevant, the mortgage.
Registration fees are calculated under the applicable tariff. The final amount depends on the characteristics of the transaction.
Administrative services
You may also choose to appoint a professional to coordinate documentation, submit taxes and manage post-completion formalities. The cost depends on the services agreed and whether they are required for your particular purchase.
5. Buying with a mortgage: additional costs to consider
If you plan to finance your purchase, you should review the mortgage terms alongside your property acquisition costs.
The principal items to consider include:
Property valuation: lenders generally require an acceptable valuation. The borrower usually pays this cost.
Mortgage arrangement fees: these apply only where provided for in the mortgage terms.
Mortgage formalisation costs: for mortgages covered by Spain's Law 5/2019, the lender generally bears specified costs relating to the mortgage deed, registration, administrative processing and the applicable mortgage stamp duty. The borrower usually pays the valuation fee and any other costs legally allocated to them.
Banking products: insurance policies, accounts or other products may affect the interest rate or overall cost of the mortgage.
Do not estimate mortgage costs simply by applying a percentage to the property price. Ask the lender for a detailed breakdown and compare the annual percentage rate (APR, or TAE in Spain), fees, interest rate and total repayment cost.
6. Worked examples: the total cost of buying property in Mallorca
The following examples illustrate how the tax treatment can affect your acquisition budget.
Example A: a €350,000 resale property
Assuming the general ITP rate applies and no tax relief is available:
Item | Amount |
Purchase price | €350,000 |
ITP at 8% | €28,000 |
Notary, Land Registry and other expenses | To be confirmed |
Total before other expenses | €378,000 |
You would therefore need €28,000 in addition to the purchase price to cover ITP, plus the other applicable transaction costs.
Example B: a €350,000 newly built property
Assuming the price excludes taxes, the standard 10% VAT rate applies, and AJD is charged at the general 1.5% rate on a taxable base of €350,000:
Item | Amount |
Purchase price | €350,000 |
VAT at 10% | €35,000 |
AJD at 1.5% | €5,250 |
Total before other expenses | €390,250 |
In this example, VAT and AJD total €40,250, before other transaction costs.
These calculations are illustrative rather than a final tax assessment. The applicable taxable base, rates and any available relief must be verified for the individual transaction.
The key point is that two properties with the same purchase price can have different acquisition costs depending on whether they are newly built or resale properties and on the buyer's eligibility for tax benefits.
7. What should international buyers know about purchasing in Mallorca?
Mallorca attracts buyers from across Europe and beyond, including those looking for a permanent home, a second residence or an investment property.
If you are buying from abroad, it is particularly important to plan the transaction carefully.
Consider the following:
Identification and documentation: determine whether you need a Spanish Foreigner Identification Number (NIE) and ensure your documentation is in order.
Source of funds: be prepared to provide the documentation required to demonstrate the origin of your funds.
Financing: compare mortgage options available to non-residents, if relevant, and assess the deposit and repayment requirements.
Tax residence: understand how your tax-residence status may affect your obligations in Spain and in your home country.
Ongoing ownership costs: budget for property tax (IBI), community fees, insurance, maintenance and utilities.
Professional advice: consider independent legal and tax advice, particularly if your circumstances involve more than one country.
Foreign buyers do not all have the same tax position. Their obligations depend on factors including tax residence, property use, ownership structure and the nature of the transaction.
A coordinated approach between your property adviser, lawyer and tax professional can help you understand the full financial implications before committing to a purchase.
8. Ongoing costs after completion
Your budget should not end when the purchase deed is signed. Owning property in Mallorca also involves recurring expenses.
These may include:
Property tax (IBI): the annual municipal tax, calculated according to the applicable cadastral assessment and local rules.
Community fees: payable where the property forms part of a community of owners.
Insurance: cover for the building, contents and other risks, as appropriate.
Utilities: electricity, water, telecommunications and other services.
Maintenance and repairs: particularly relevant for older properties, houses with gardens or swimming pools, and homes exposed to coastal conditions.
Other tax or regulatory obligations: depending on the location, use and ownership circumstances.
If you are buying a second home or an investment property, estimating these recurring costs will help you assess the long-term affordability of ownership.
9. Frequently asked questions about buying property in Mallorca
How much should I budget on top of the purchase price?
The amount depends on whether you are buying a new-build or resale property, the applicable taxes, the transaction costs and your personal circumstances. For resale properties, ITP is often a substantial expense. For qualifying new-build purchases, VAT and AJD generally need to be considered.
Calculate the expected costs before signing a binding purchase contract and allow for any additional expenses that may arise.
Who pays the notary fees?
The allocation of notarial costs depends on the applicable law, the type of deed and the terms agreed by the parties within the legal framework. It should not be assumed that every notary expense automatically falls to the buyer or the seller.
Clarify the allocation of costs before signing the purchase contract and seek advice from the notary where necessary.
What tax applies to a resale property in Mallorca?
ITP generally applies to resale property purchases. The general Balearic Islands tariff is progressive, with rates of 8%, 9%, 10%, 12% and 13% across the relevant value bands. Reduced rates or tax benefits may be available to eligible buyers.
What taxes apply to a newly built property?
A qualifying new-build purchase generally involves VAT and may also be subject to AJD. The precise tax treatment depends on the transaction and the applicable rules.
Are there tax benefits for first-time buyers?
Certain benefits are available to eligible buyers under Balearic Islands legislation. The conditions can include age, property value, primary-residence requirements and other criteria. Always verify the rules in force when your purchase takes place.
Do foreign buyers pay the same property purchase taxes?
The taxes on the acquisition depend primarily on the nature of the transaction and the applicable Spanish tax rules. However, a buyer's wider tax obligations may vary according to tax residence and individual circumstances. International buyers should obtain advice covering their particular situation.
When should I calculate the purchase costs?
Ideally, before signing a reservation agreement or contrato de arras (private purchase deposit contract). This allows you to confirm that you have sufficient funds for the purchase price, taxes and transaction expenses before making a binding commitment.
10. Plan your property purchase in Mallorca with confidence
Buying property is a significant decision. Understanding the full acquisition cost from the outset helps you plan your finances, compare properties and move forward with greater confidence.
Before committing, compare the total cost of the properties you are considering, confirm the applicable taxes and check whether any tax relief may be available.
If you are considering buying a property in Mallorca, I can help you explore suitable opportunities, understand the practical stages of the purchase and identify the key questions to address before making a decision.
Thinking of buying a property in Mallorca?
Get in touch to discuss the type of property you are looking for, your preferred location and your budget. Together, we can establish a clear direction for your search and help you take the next steps towards finding the right property.
Disclaimer: This article is for general information only and does not constitute legal, tax or financial advice. Tax rates, taxable bases and relief eligibility should be verified for each transaction and at the relevant tax point. Consult the Balearic Islands Tax Agency (ATIB) and the qualified professionals involved in your purchase before relying on any tax calculation.
Comments