Buying a Property on Mallorca

Property on MallorcaAlthough Mallorca is an administrative part of Spain, the local real estate market is somewhat different than of the market in the continental part of Spain. Mallorca is considered to be a higher-end, more exclusive place to live with many famous people known to own houses there. The island offers higher standards for services, which also include higher real estate prices. Prices for apartments start at about EUR 200,000, townhouses and semi-detached homes start at about EUR 300,000 and free-standing house prices start at about EUR 500,000. The real estate markets on the other Balearic Islands (Ibiza and Menorca) are similar the above.

The same conditions that apply on the Spanish mainland will apply to an EU citizen or an EU-based legal entity buying property on Mallorca (there are no legislative restrictions applicable to EU buyers). In order to have the title transferred into your name, you will need to obtain a Spanish tax ID number (NIE). The notarial record on the ownership of the property (escritura de compraventa) serves as proof of ownership.

One-Time Taxes and Fees Associated with the Purchase of a Property

When buying a brand new property, the buyer must pay (as the first owner) VAT (current rate = 7%). When buying an older property, the buyer has to pay a property transfer tax (range = 6 - 7% of price). Notary fees and other charges related to the transfer of title amount to approximately 3 % of the purchase price.

Ongoing Ownership-Related Expenses

If the property is part of a condominium development or an apartment complex, the owner will have to pay a community fee (comunidad), which pays for services such as common area cleaning, security, common area gardening, pool maintenance, repairs to common areas, etc. The level of the community fee depends on the type of property and the level of services provided.

There are separate charges for utilities (water, electricity, gas, phone, etc.).

Annual property taxes, which are equal to roughly 0.7% of the value of the property, are determined using local tax schedules, as applicable to the given area.

(For those owners that might be interested, we are able to arrange property management services using a local company that will take care of the property for an owner – handling tasks such as rentals, cleaning, utility bills, etc. Price estimates are supplied on an individual basis, upon request.)

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