Buying Property in Mallorca

On top of the purchase price you should budget between 10% and 12% in additional costs. For a €400,000 resale property, ITP transfer tax in the Balearic Islands typically amounts to €32,000–€36,000, notary fees to €800–€1,500, Land Registry fees to €400–€900, and lawyer or gestoría fees depending on the agreed scope. In total, allow for between €40,000 and €50,000 on top of the purchase price to complete without liquidity pressure.

Yes, non-residents can purchase property in Spain freely. You will need a NIE (Spanish tax identification number), a Spanish bank account for the transaction and, if you cannot attend the notary in person, an apostilled power of attorney from your country. You should also be aware that if the seller is a non-resident, the buyer is legally required to withhold 3% of the purchase price and pay it to the Spanish tax authority as an advance payment of the seller's capital gains tax.

The NIE is the tax identification number required by all non-Spanish nationals to sign deeds, pay taxes and open bank accounts in Spain. It can be applied for at the Spanish consulate in your country of residence — processing times vary from 2 to 8 weeks depending on the consulate. It can also be obtained in Spain directly at a police station with a prior appointment, or through a representative acting under a notarised power of attorney.

Legal due diligence is the full review of the property before you sign any commitment. It covers the Land Registry title search, ownership and charges, cadastral records, planning status, building licences, community of owners debts and outstanding IBI bills, and any pending administrative proceedings. In Mallorca it is particularly important because a significant number of properties have unlicensed works, rural land with restrictions, or historical charges on title that have never been formally cancelled.

In Spain, preliminary contracts most commonly take the form of arras penitenciales (Article 1454 of the Civil Code): either party may withdraw — the buyer loses the deposit, the seller returns it doubled. These are the standard form for residential property. Arras confirmatorias, by contrast, operate as a part-payment of the price and do not permit unilateral withdrawal — breach only gives rise to a claim for damages or enforced completion. The type of contract has significant practical consequences and should always be clearly agreed in writing.

A non-resident seller pays Spanish capital gains tax (IRNR) at 19% on the profit made. The buyer is also legally required to withhold 3% of the total sale price and pay it directly to the Spanish tax authority as an advance against the seller's liability. If the withholding exceeds the final tax due, the seller can claim a refund. Municipal capital gains tax (plusvalía) may also apply unless there is no increase in the land value.

This is a common situation. The standard solution is to coordinate the economic cancellation of the mortgage at completion: part of the purchase price is paid directly to the seller's bank to redeem the loan and the charge is released simultaneously with the transfer. The formal cancellation at the Land Registry can be processed afterwards. This coordination needs to be anticipated in the preliminary contract and agreed in advance with the notary and bank.

Rural land accounts for a very significant proportion of Mallorca's territory. There are different categories — ordinary rural, protected rural and special protection — each with very different permitted uses. In general, building new residential properties is highly restricted, and renovation or extension works are subject to the specific category and the Consell de Mallorca's planning rules. Before buying rural land or a property with existing buildings on rural land, it is essential to verify the actual land classification and the planning status of any existing structures.

The typical period between signing the preliminary contract and completing at the notary is 4 to 10 weeks. The most common determining factor is mortgage financing, which requires a valuation, bank credit analysis and the issue of a binding offer (which by law must be provided at least 10 business days before completion). Complex due diligence, obtaining a NIE or coordinating a power of attorney from abroad can also extend the timeline. Agreeing realistic timeframes from the outset is key to a smooth transaction.

It is not legally required, but it is strongly advisable. The notary authenticates the deed but does not advise either party. A gestoría handles administrative filings but does not carry out legal or planning reviews. A specialist property lawyer reviews the entire transaction, identifies risks before you sign and negotiates terms in your favour. On a transaction of €300,000 or more, the cost of legal advice is proportionate to the risk it mitigates.