Buying Property in Mallorca: Taxes, ITP, Notary, IBI & Modelo 210 Explained

Buying Property in Mallorca: Taxes and Costs — The Short Answer

For resale properties in Mallorca, buyers should generally budget around 10–15% of the purchase price for acquisition costs — made up of transfer tax (ITP), notary, land registry, and possibly lawyer fees. After the purchase, ongoing annual costs follow: the local property tax (IBI) and, for non-residents, the Modelo 210. Planning for these total costs from the outset avoids unpleasant surprises in the first year after purchase.

At a Glance

• Resale property: ITP under a progressive scale, currently 8–13%
• New-build from a developer: generally VAT + stamp duty (AJD) instead of ITP
• Additional purchase costs: notary, land registry, possibly lawyer/gestoría
• After the purchase: IBI for all owners, Modelo 210 for non-residents
• In the purchase year: for own use/vacancy, the Renta imputada is calculated pro rata from the date of transfer; for rental, actual rental income is declared from the start of the letting

Why This Matters

Many buyers only calculate the pure purchase price — and overlook that acquisition costs in Mallorca are considerably higher than in many home countries. On top of that: unlike the one-off notary or transfer tax expense, the purchase creates a permanent annual tax obligation — Modelo 210 — which many buyers only discover months or years later.

From our experience as real estate agents in Mallorca (DC Finest Real Estate, Port d'Andratx), we know: the question "What will this cost me in total?" is usually only asked once the notary appointment is approaching — whereas full cost planning should be part of the purchase decision from the start.

Purchase Costs: One-Off Costs of Acquisition

Transfer Tax (ITP — Impuesto de Transmisiones Patrimoniales)

ITP applies when buying a resale property (not a new-build from a developer). This section refers to the purchase of a resale property. When buying a new-build from a developer, ITP generally does not apply; instead, 10% VAT (Spanish sales tax) plus 1.5% AJD (stamp duty) apply — together 11.5% in tax costs alone, regardless of the purchase price. The tax treatment should be checked before signing the purchase contract.

ITP in the Balearic Islands is a progressive tax: the purchase price is split into brackets, and each bracket is taxed at its own rate. You do not pay a fixed percentage on the entire property, but the tax accumulates in stages:

Taxable base	ITP rate (Balearic Islands, as of 2026)
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%

The scale is progressive: the higher rate applies only to the amount within that bracket, not automatically to the entire purchase price.

Important: ITP is not always calculated only on the agreed purchase price. What matters is generally the tax base; since 2022, the Catastro's Valor de Referencia may be relevant if it exceeds the declared purchase price. This value can be checked in advance online via the Spanish land registry office (Catastro) using the cadastral reference. Before completing a purchase, it should therefore be checked whether a reference value exists and whether it exceeds the agreed price.

The exact bracket thresholds and rates are set by the Balearic regional government and can change — current rates should be verified with the relevant notary or tax adviser before completing a purchase.

Notary and Land Registry Costs

The actual costs depend on the purchase price, the scope of the deed, registry entries, and financing. They are generally much lower than ITP in relative terms. As a rough guide, including minor administrative/gestoría costs, one can often budget around 0.3–0.8%.

Lawyer Fees (optional, but recommended)

For international buyers, engaging a Spanish-speaking lawyer or gestoría is common — particularly to check encumbrances, building rights, and the Escritura (notarial purchase deed). Typical fee structures in the international buyer market are often around 1% of the purchase price, sometimes with a minimum fee or a different flat rate. Depending on complexity, language, financing, legal due diligence, and provider, costs may be higher or lower.

Obtaining an NIE

The NIE (Número de Identidad de Extranjero, Spanish foreigner identification number) should be in place no later than before signing the Escritura. It is required for the tax process, payment of the transfer tax, and subsequent registry and administrative communication. In practice, a missing NIE can delay or prevent the notary appointment — particularly because without an NIE, the ITP cannot be paid and the property cannot be registered in the land registry.

Worked Example: Acquisition Costs for a Property in Port d'Andratx

Situation: A German couple buy a resale property in Port d'Andratx for a purchase price of €800,000.

ITP is calculated in stages:

• First €400,000 × 8% = €32,000
• Next €200,000 (€400,000–600,000) × 9% = €18,000
• Remaining €200,000 (€600,000–800,000) × 10% = €20,000
• Total ITP: €70,000 (effective rate: 8.75%)

Cost item	Amount (approx.)
Purchase price	€800,000
ITP (progressively calculated)	€70,000
Notary and land registry costs (approx. 0.5%)	€4,000
Lawyer fees (approx. 1%)	€8,000
Total acquisition costs	approx. €82,000
Total investment	approx. €882,000

In this example, acquisition costs come to around 10.25% of the purchase price. For very high-value properties, financing, or higher advisory costs, the overall percentage can be higher.

What We See in Practice

From our work in the Mallorca real estate market and with Fiscaro, we regularly observe three patterns:

1. Acquisition costs calculated too late: many buyers initially budget only based on the purchase price and only realise shortly before the notary appointment that additional costs need to be covered. We recommend factoring in acquisition costs from the start of budgeting — not just at the point of signing the contract.

2. The annual tax obligation is completely overlooked: the notary appointment, ITP, and land registry entry appear to be a "one-off" task — that this creates a recurring annual tax obligation (Modelo 210) is something many buyers only discover months later, often by chance or through a letter from the AEAT.

3. IBI and Modelo 210 are confused: the local property tax (IBI) and Modelo 210 are two separate, independent taxes — IBI goes to the municipality, Modelo 210 to the national AEAT. Both apply annually, independently of each other.

Ongoing Annual Costs After the Purchase

IBI — The Local Property Tax

IBI (Impuesto sobre Bienes Inmuebles) is the Spanish property tax levied by the municipality — comparable to German property tax. The amount depends on the Valor catastral (cadastral value) and the rate set by the relevant municipality. The IBI bill regularly contains key data such as the Valor catastral and Referencia Catastral. The cadastral revision status must additionally be checked depending on the municipality.

Practical note: while the municipality usually collects IBI conveniently by direct debit from your Spanish bank account once set up, the national non-resident tax (Modelo 210) is not collected automatically. You must calculate, declare, and file this tax proactively yourself each year (or have it filed for you) — this is exactly what Fiscaro was built for.

Modelo 210 — The Annual Non-Resident Tax

Non-residents must declare their Spanish property income via Modelo 210. For own use or vacancy, this concerns the Renta imputada; for rental, actual rental income. With mixed use, both types of declaration may be relevant side by side. For more detail, see our in-depth guides on Own Use and Rental Income.

What Does This Mean in Practice for Buyers?

For most buyers of a Mallorca property, this means:

• In addition to the purchase price, 10–15% in acquisition costs should be budgeted
• The NIE should be in place no later than before the Escritura
• From the year of purchase, an annual tax obligation (Modelo 210) arises, regardless of use
• With co-ownership (e.g. married couples), each owner files their own separate Modelo 210 declaration
• IBI and Modelo 210 must be considered separately — both apply annually

How High Will Your Annual Tax Be? Calculate Now

Once the purchase is complete, the future Modelo 210 tax burden can already be estimated in advance based on the cadastral value. Our calculator gives you an initial estimate.

→ Calculate your future Modelo 210 tax now

Common Mistakes When Buying Property in Mallorca

1. NIE applied for too late — delays or jeopardises the notary appointment
2. Acquisition costs not fully budgeted — leads to liquidity issues shortly before completion
3. Modelo 210 obligation completely overlooked — leads to late filings with surcharges years later
4. Escritura not carefully reviewed — particularly with co-ownership: ownership shares must exactly match the intended split, as later corrections are cumbersome
5. Cadastral value and market value confused — for Modelo 210, only the Valor catastral is relevant, not the purchase price

Checklist: From Purchase to Your First Modelo 210 Declaration

• NIE in place before the Escritura
• Escritura (notarial purchase deed) reviewed by lawyer/gestoría
• ITP (via Form Modelo 600) filed and paid within one month of signing the Escritura
• Land registry entry initiated
• First IBI bill received and Valor catastral noted
• Ownership shares correctly documented in the Escritura for co-ownership
• First Modelo 210 declaration planned for the following year

FAQ

Do I need to file Modelo 210 already in the purchase year? For pure own use or vacancy: generally no. The Renta imputada is calculated pro rata from the date of transfer in the purchase year and declared the following year. For tax year 2025, the period 1 January to 31 December 2026 still applies; from tax year 2026, the deadline for the Renta imputada generally starts on 1 April of the following year.

For rental, a distinction applies: rental income is not calculated pro rata across the year, but declared as actual rental income from the start of the letting. The specific deadline depends on whether you file separately or under annual grouping.

What is the difference between IBI and Modelo 210? IBI is a local property tax that every owner pays regardless of tax residence. Modelo 210 is a national income tax specifically for non-residents — both apply annually in addition to each other.

Can I negotiate the acquisition costs? ITP is set by law and not negotiable. Lawyer fees, and to some extent notary fees, can vary by provider — comparing options before engaging one is worthwhile.

Do I need a lawyer, or is the notary enough? The notary verifies the deed, not the economic or legal suitability of the purchase for you personally. For international purchases — particularly regarding encumbrances, building rights, or complex ownership structures — we additionally recommend independent legal review.

Roughly how much is the annual Modelo 210 tax? This depends on the Valor catastral, the type of use, and your tax residence. For pure own use, the tax is usually low (often in the low hundreds of euros per year) — our calculator gives you a quick estimate.

Sources

• Real Decreto Legislativo 1/1993 (ITP and AJD Tax Act)
• Real Decreto Legislativo 5/2004 (LIRNR — Non-Resident Income Tax Act)
• ATIB (Agència Tributària de les Illes Balears) — ITP rates 2026
• AEAT: Modelo 210 — Instrucciones

Conclusion

Buying property in Mallorca involves more costs than just the purchase price — and an obligation that extends well beyond the notary appointment. Planning for 10–15% in acquisition costs from the start, and keeping the annual Modelo 210 obligation in view right after the purchase, helps avoid the most common costly surprises.

Fiscaro supports you with the ongoing Modelo 210 process from year one — simple, digital, and tailored to the typical cases of non-resident owners.

→ File your Modelo 210 now