TAXATION WHEN BUYING A PROPERTY IN MALLORCA.

When you buy a property in Mallorca you have to pay TAXES

Those will variate depending if you are buying a new or used property.

BUYING NEW PROPERTY: In this case vendor will add to the price 10% IVA (Impuesto sobre el Valor Añadido).

This + 10% will be on the invoice of the purchase, so you will pay directly to the vendor, who will wire it to the tax authorities.

On top of this, during the 30-day period after signing the purchase deed, you have to pay another 1.2% for AJD (Actos Jurídicos Documentados) (Stamp Duty).  

So, for a €300.000 NEW PROPERTY you end up paying €337.200.

………………………………BUYING A SECOND-HAND PROPERTY: Whe property it’s not new, so seller it’s not a building company, then you pay nothing on the day you sign the purchase deed but you haver 30 days to pay AJD (Actos Jurídicos Docuentados) This is the Transmission Tax

This tax is progressive, and will increase proportionally to the value of the property as follows.

-From €0 to €400.000…………………8%
-From €400.001 to €600.000……….9%
-From €600.001 to €1.000.000…..10%
-Over €1.000.001………………………11%
..



 So ITP tax for purchasing a €185.000 property is €14.800.
 .
 So, the ITP tax for purchasing a €2.350.000 property is €238.500.

COSTS

When you buy a property you have to assume costs. 

  • Notary deed.
  • Property Registry Fee
  • Lawyer
  • Mortgage costs.

Costs and expenses of buying a property are approximately an extra 10 or 13%.


ANNUAL TAXES

  • .-IBI (Land Tax) The “Impuesto sobre Bienes Inmuebles” 
  • – National income tax for NON-RESIDENTS in Spain only 
  • – Garbage collection: 
  • – Waste incinerator tax.