Taxes and Costs of Buying a Home in Mallorca in 2026

When budgeting for a home in Mallorca, the price is only part of the picture. Taxes and associated costs add up to a significant amount, so it pays to understand them before making an offer. Here is what you pay in the Balearic Islands in 2026, both at purchase and every year after.

Resale property: transfer tax (ITP)

When you buy from a private seller you pay transfer tax, ITP (Impuesto sobre Transmisiones Patrimoniales). The Balearic Islands apply a progressive banded scale:

• Up to €400,000: 8%
• €400,000.01 to €600,000: 9%
• €600,000.01 to €1,000,000: 10%
• €1,000,000.01 to €2,000,000: 12%
• Over €2,000,000: 13%

Each rate applies only to the part of the value falling within its band. Example for €700,000: €32,000 (8% on 400,000) + €18,000 (9% on 200,000) + €10,000 (10% on 100,000) = €60,000, an average rate of 8.57%.

Two points to note:

• Reference value. Since 2022 the tax base is the higher of the price in the deed and the Land Registry Office's reference value (valor de referencia). If you buy below it, you pay tax on the reference value. You can check it free of charge on the Catastro website.
• Reduced rates. Reduced rates and allowances exist for the main home of certain resident buyers, with conditions and value limits that changed in 2026. They generally do not apply to a foreign buyer's holiday home.

New build: VAT and stamp duty

When buying a new home directly from the developer, you pay 10% VAT (IVA) instead of ITP, plus stamp duty, AJD (Actos Jurídicos Documentados), whose general rate in the Balearics is 1.5%. Reduced rates exist for some main-home cases. When a new home is resold later, ITP applies again.

Notary, Land Registry and gestoría

• Notary: fees follow an official scale and depend mainly on the price and length of the deed. By custom, and unless agreed otherwise, the buyer pays for the purchase deed.
• Land Registry: also on an official scale. Registration is what protects your ownership against third parties.
• Gestoría: many buyers use a gestoría to file the taxes and handle registration, for a modest fee.

Together these items are small compared with ITP or VAT, but ask for a quote in advance.

Lawyer

We always recommend an independent lawyer. Fees vary: some firms charge a fixed fee, others a percentage of the price, often around 1%. Get the quote in writing.

Buying with a mortgage

Under Spain's mortgage law 5/2019, for loans to individuals the bank pays the notary fees for the loan deed, registration, the gestoría and the stamp duty on the mortgage. The buyer pays the valuation (tasación), any arrangement fee and any copies requested. Non-residents are usually offered a lower loan-to-value than residents, so speak to the bank early.

Annual running costs

IBI and municipal charges

IBI is the local property tax, set by each town hall on the cadastral value: Calvià for Peguera and Santa Ponça, Andratx for Camp de Mar and Port d'Andratx. A waste collection charge is usually added.

Community fees

Apartments and developments with shared areas pay community fees, which vary widely with services such as pools, gardens, lifts or a caretaker.

Non-resident income tax

If you do not live in Spain and do not rent the property out, you declare a deemed income each year: 2% of the cadastral value, or 1.1% if that value has been revised under the conditions set by law. Tax is charged at 19% for EU/EEA residents and 24% for others. If you rent it out, you are taxed on the rental income instead. This is filed on form 210.

Other

Home insurance, utilities, maintenance and, for larger estates, possible wealth taxes your adviser should assess.

A rule of thumb

For a resale property, allow as a guide at least 9 to 10% on top of the price for ITP and all other costs, more in the higher bands.

The figures in this article are a guide only; a lawyer or gestor should confirm them for your specific case.

Want a figure for your purchase?

Ericsus & Falk can help you estimate the total budget for buying in Peguera and south-west Mallorca and put you in touch with trusted professionals. Call us on +34 694 462 346.

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Cover photo: Arieleisenhammer, CC BY-SA 4.0, Wikimedia Commons.