Resale homes. You pay Transfer Tax (Impuesto sobre Transmisiones Patrimoniales, ITP), which in the Balearic Islands is progressive: from 8% to 13% depending on the value of the property. Reduced rates exist, but they are designed for residents buying their main home within value limits, so they rarely apply to a foreign buyer.
New builds. You pay 10% VAT and 1.5% Stamp Duty (Actos Jurídicos Documentados, AJD).
Other costs. Notary, Land Registry, administrative agency (gestoría) and legal advice. If there is a mortgage, the valuation and associated costs are added.
As a rough guide, you should set aside an additional 10% to 14% on top of the price, depending on the value of the property and whether it is new or resale.
If the seller is a non-resident, the buyer must withhold 3% of the price and pay it to the Tax Agency on account of the seller's tax. The buyer must also withhold the amount needed to pay the Tax on the Increase in Value of Urban Land (IIVTNU), known as the municipal plusvalía, since in this case the buyer is liable for paying it. The notary oversees this, but it is worth knowing in advance.
Annual taxes as a non-resident owner
Once the property is purchased, the non-resident owner pays every year:
IBI, the municipal property tax.
Urban Solid Waste Fee, the charge for the collection and disposal of household waste.
Non-Resident Income Tax (IRNR). If the property is not rented out, tax is paid on deemed income calculated on the cadastral value, at 19% for EU and EEA residents and 24% for everyone else. If it is rented out, tax is paid on the income earned.
Wealth Tax, only if the net value of assets in Spain exceeds the exempt thresholds.
The final tax position also depends on your country of residence and any double taxation treaties, so it is advisable to plan it before signing, especially if buying through a company.
Mortgages for non-residents
Spanish banks grant mortgages to non-residents, although they usually finance a lower percentage of the value than for a resident and ask for more documentation: income in the home country, tax returns and, sometimes, translated credit reports. It is worth obtaining pre-approval before signing the deposit contract, so that the timeline for the deed is realistic.
Holiday rentals: what you need to know before buying
This is the question that most shapes an investment purchase in Mallorca, and the rules have tightened in recent years. In Palma, the City Council has banned the creation of new holiday rental places in any type of property, including detached houses, semi-detached houses and penthouses, not just flats. Existing legal licences may continue to operate.
Elsewhere on the island, the rules vary by municipality and property type. The practical advice is clear: if holiday rentals are part of the plan, buy a property that already has a valid licence and verify it before signing, without assuming you will be able to obtain one later.
New builds in Mallorca: why they appeal to international buyers
For many foreign buyers, a new build is the simplest option:
More predictable taxation. VAT is paid instead of ITP, with no progressive scale, and new builds fall outside the proposed tax on non-EU non-residents.
Protection of payments made. Payments on account during construction must be guaranteed by the developer through a bank guarantee or insurance.
Fewer planning risks. Licences, floor areas and specifications are documented from the outset.
Energy efficiency. Current developments offer high energy ratings, which matters for owners who do not live in the property year-round and want to keep maintenance costs down.
Scope for customisation. Buying off-plan, you can choose finishes and sometimes layouts, and follow the construction remotely.
In Palma, much of the new-build supply is concentrated in areas such as Nou Llevant and on the outskirts of the city, while elsewhere on the island small-scale developments and newly built villas are common.
Where to buy in Mallorca by profile
To live year-round with city amenities: Palma. Santa Catalina, the old town and Portixol attract those looking for neighbourhood life close to the sea; Nou Llevant appeals to those who prefer a new home.
For a second home by the sea with an established international community: the southwest, with Calvià (Bendinat, Santa Ponsa) and Andratx (Port d'Andratx).
For more space and peace and quiet a short distance from Palma: municipalities such as Llucmajor.
For a slower pace of life: the north (Pollença, Alcúdia) and the Serra de Tramuntana (Sóller), with more traditional houses and country estates, where rural land status and military authorisation should be reviewed with particular care.
Common mistakes
Signing a deposit contract for a rural property without a military authorisation clause.
Buying with a view to holiday rentals without checking the licence.
Budgeting only for the price and forgetting the 10% to 14% in taxes and costs.
Not verifying that what has been built matches the Land Registry.
Waiting until you have chosen a property to apply for the NIE, which delays the whole process.
How to choose an estate agent in Mallorca as a foreigner
For a buyer who does not live on the island, the agency is the one who sees what they cannot. It is worth looking for an agency that:
Has an office in Mallorca and real knowledge of each area, not just a portfolio.
Can communicate fluently in the buyer's language.
Works with new builds as well as resale properties, so both options can be compared.
Coordinates the notary, lawyer, bank and gestoría, and keeps the buyer informed remotely.
Flags legal limits (holiday rentals, rural land) before showing a property, not after.
Frequently asked questions
Do I need to be a resident to buy a house in Mallorca?
No. Anyone, whether or not they reside in Spain, can buy property in Mallorca. All you need is an NIE and the means to prove the origin of the funds.
How much tax do you pay when buying a home in Mallorca?
On a resale home, ITP ranges from 8% to 13% depending on the value. On a new build, 10% VAT plus 1.5% AJD. Notary, registry and gestoría fees are added on top.
Do British buyers need military authorisation to buy in Mallorca?
Since Brexit, British buyers are non-EU buyers. In Mallorca they need military authorisation if buying on rural land; for a flat or house on urban land, generally not.
Can I buy property in Mallorca without travelling to the island?
Yes. With a power of attorney, a representative can obtain the NIE and sign the deposit contract and the deed. Even so, we recommend visiting the property or, at the very least, having someone you trust see it in person.
Can I rent my home out to tourists?
It depends on the municipality, the type of property and whether it already has a licence. In Palma, no new holiday rental places are granted for any property type. If holiday rentals are key, buy a property with a valid, verified licence.
Does buying a home in Spain give you the right to residency?
Not anymore. The golden visa for real estate investment was abolished in April 2025.
How long does it take to buy a home in Mallorca?
From reservation to deed usually takes two to three months. If military authorisation or a mortgage is needed, it may take longer.
Buying in Mallorca with aProperties
At aProperties, an estate agency with offices in Madrid, Barcelona, Valencia and Palma, we support buyers from many countries as they settle on the island. Our Palma team knows every area and every type of property, from resale homes to new developments, and coordinates the entire process so buyers can make decisions with complete information, wherever they are.
If you are thinking about buying in Mallorca, we can help you define the area and type of home that best suit you before you start viewing properties.