FAQ – Frequently asked questions about buying and selling property in Mallorca

Mallorca is one of Spain’s most attractive property markets. However, the process of buying or selling property differs significantly from the procedures in the United Kingdom, Ireland or the United States.

Here you will find answers to our customers’ most frequently asked questions about buying and selling property in Mallorca.

 

FAQ for buyers

General information about buying property in Mallorca

How does the property purchase process work in Mallorca?

The purchase process usually consists of three steps:

1. Reservation agreement (Contrato de Reserva): The property is reserved for you, usually for a small deposit of £2,500–£5,000. This is only done in individual cases, e.g. if time is of the essence and the prospective buyer wants to secure the property at all costs.

2. Preliminary purchase agreement (Contrato de Arras): After legal and technical verification, a private contract is concluded, in which 10% of the purchase price is usually paid as a deposit.

3. Notarised deed (Escritura Pública de Compraventa): The final purchase contract is signed at the notary’s office and the transfer of ownership is entered in the land register (Registro de la Propiedad).

What documents do I need to purchase a property in Mallorca?

You will need:

• A valid passport or identity card

• A Spanish tax number (N.I.E.)

• Proof of the origin of the funds (in accordance with money laundering legislation)

• Confirmation of financing if you are buying with a loan

We will assist you with applying for the N.I.E. and coordinate the documents with the notary, bank and solicitor.

Do I need a solicitor in Mallorca?

Yes, this is advisable. An independent solicitor (abogado) is highly recommended for buyers in Spain. They will check the ownership structure, outstanding encumbrances (e.g. mortgages), permits, development status and draw up or check the contracts. This will help you avoid legal risks.

How long does it take to buy property in Mallorca?

As a rule, the entire process – from reservation to notarisation – takes around six to ten weeks, in special cases as agreed between the seller and buyer.

In the case of new builds or construction projects that are not yet complete, the handover may be delayed accordingly.

 

Costs and taxes when buying

What additional costs are involved in buying property in Mallorca?

You should expect to pay a total of around 10–13% in additional costs on top of the purchase price. These are broken down as follows:

• Property transfer tax (ITP):

For existing properties in the Balearic Islands, a graduated tax of between 8% and 13% applies, depending on the purchase price.

Example:

o up to €400,000 → 8%

o €400,001 – €600,000 → 9%

o €600,001 – €1,000,000 → 10%

o over €1,000,000 → 13%

• Value added tax (IVA) + stamp duty (AJD):

For new builds or first-time sales, the IVA is 10%, plus stamp duty of 1.5%.

• Notary and land registry fees: approx. 1–2%

• Legal fees: approx. 1% of the purchase price

Do I need to open a Spanish bank account?

It is not necessary to open a Spanish account. Although ancillary purchase costs, ongoing fees and later ancillary costs such as water, electricity or property tax can be debited from it, in almost all cases a European account is sufficient.

What is an N.I.E. number and how do I obtain one?

The N.I.E. (Número de Identificación de Extranjero) is your personal tax number for all official transactions in Spain. It is mandatory for purchasing property.

We can help you apply for it – either in Mallorca or through the Spanish consulate in your home country.

Can I finance a property in Mallorca?

Yes. Many buyers finance through Spanish banks, which usually finance up to 60-70% of the purchase price for non-residents. We are happy to assist you in selecting a suitable bank and preparing the necessary documents.

 

Transfer of ownership and notary

What role does the notary play in Mallorca?

The notary checks the legality of the transaction, certifies the purchase contract and registers the change of ownership with the Land Registry (Registro de la Propiedad).

Unlike in the United Kingdom, the notary does not represent either party, but ensures that the documents are legally correct.

When is the purchase price paid?

The purchase price is paid on the day of notarisation – usually by certified bank cheque (‘cheque bancario’) or bank transfer.

The notary appointment is also the date on which you receive the keys.

What are the ongoing costs after the purchase?

After the purchase, owners pay annually:

• Property tax (IBI) – depending on the cadastral value of the property

• Rubbish collection fee (Tasa de Basura)

• Non-resident tax (Impuesto sobre la Renta de No Residentes), if you are not a tax resident in Spain

• Community fees (for flats or complexes)

FAQ for sellers

Preparing for the sale

What documents do I need to sell a property in Mallorca?

You should have the following documents ready for the sale:

• Proof of ownership (Escritura)

• Current land registry extract (Nota Simple)

• Energy performance certificate (Certificado de Eficiencia Energética)

• Copy of ID and N.I.E. number

• Current property tax and service charge statements

• Certificate of occupancy (Cédula de Habitabilidad), if applicable

How do I determine the right selling price?

We carry out a market-based valuation based on location, amenities, condition and comparative prices of similar properties in the region.

The Mallorcan property market is very diverse, particularly between the city, coastal regions and rural areas.

 

Taxes and duties on sale

What taxes do sellers have to pay in Mallorca?

When selling a property, the following taxes are usually payable:

• Plusvalía Municipal:

A municipal tax on the increase in value of the property since the last change of ownership. It is levied by the respective municipality.

• Capital gains tax (Impuesto sobre la Renta):

For non-residents, this tax is 19% of the profit made. The profit is calculated as the sale price minus the original purchase price and eligible incidental costs.

As a non-resident, do I have to pay tax?

Yes. When a non-resident sells a property, a tax deduction of 3% of the sale price is retained. This amount is paid to the tax office (Agencia Tributaria) and can later be offset against the actual tax.

 

Sales process and procedure

How does the sales process work?

1. Signing of the reservation contract (Contrato de Reserva)

2. Review of documents by a solicitor and preparation of the preliminary purchase agreement (Arras)

3. Receipt of the deposit (usually 10% of the purchase price)

4. Preparation of the notarised purchase agreement

5. Notary appointment and handover of the property

We accompany you throughout the entire process, coordinate solicitors, notaries and buyers, and ensure that everything runs smoothly.

When will I receive the proceeds from the sale?

The purchase price is handed over in the form of a bank cheque at the notary appointment or transferred to your Spanish account as soon as the notarised purchase agreement has been signed.

 

After the sale

What formalities need to be completed after the sale?

After the sale, you should:

• Cancel your utility contracts (electricity, water, internet) or transfer them to the buyer

• Settle any outstanding municipal taxes

• Adjust your tax return for the year of sale

• Inform your bank of the sale if you had a mortgage

 

Any questions?

We would be happy to advise you personally on all matters relating to the purchase or sale of a property in Mallorca.

Contact us by telephone, email or via our contact form – we speak German, Spanish and English and will guide you competently through the entire process.