Property Transfer Tax in the Balearic Islands: rates and calculation when buying property
Quick answer (general rule)
Property Transfer Tax (ITP) in the Balearic Islands applies, as a general rule, to the purchase of second-hand property and other real-estate transfers subject to the transfer tax regime. New-build property, by contrast, is generally subject to VAT plus Stamp Duty (AJD). Before signing a deposit agreement or deed it is advisable to review the applicable rate, the tax base, the cadastral reference value, Form 600, the filing deadline and any available tax reliefs.
Quick answer (general rule)
- Second-hand property: generally TPO.
- New-build property: generally VAT + AJD.
- New residential property: VAT is generally 10%.
- The general TPO scale can also apply to commercial and other real-estate assets.
- High-value or complex deals require tax classification review before signing.
Property Transfer Tax rates in the Balearic Islands for real estate transactions
This is a practical technical summary. It must always be confirmed against the chargeability date, legal setup of the deal and supporting documentation.
1) Second transfer: general TPO rule
A second-hand transfer is generally taxed under TPO.
For higher ticket operations, article 10 scale rates can reach 13%.
- Up to €400,000: 8%.
- €400,000.01 to €600,000: 9%.
- €600,000.01 to €1,000,000: 10%.
- €1,000,000.01 to €2,000,000: 12%.
- Above €2,000,000: 13%.
- The specific application depends on the chargeability date, the type of transaction, the tax base and whether any tax relief applies.
2) Garages transferred separately
If a garage unit is transferred separately, the specific article 10 scale applies.
- Up to €30,000: 8%.
- Amount above €30,000: 9%.
- Garage annexes to a home (up to two) follow the general real-estate rule.
3) New build: VAT + AJD
For new-build purchases, the general framework is VAT + AJD.
When sold by the developer, VAT on a new dwelling is generally 10%.
4) AJD: general 1.5% rate
Article 15 sets a general 1.5% AJD rate for qualifying notarised documents.
5) AJD at 1.2% for certain first main homes
Article 17 provides a 1.2% AJD rate in specific first-main-home scenarios subject to value and ownership requirements.
It is not automatic and must be evidenced properly.
6) AJD at 2% for certain transactions of €1,000,000 or more
Article 17 bis provides a 2% rate in certain qualifying real-estate transactions above the legal threshold.
Tax benefits to review carefully
Reduced rates and reliefs depend on strict legal requirements and the exact chargeability date.
If conditions are not met, supplementary tax and interest may apply.
The 4% and 2% reduced TPO rates and the 100% article 14 quater relief must be checked case by case.
Which tax applies depending on the deal
Second-hand residential transfer: usually TPO.
New residential transfer: usually VAT + AJD.
Commercial units, offices, warehouses, land plots and high-value deals require tailored tax analysis.
Main legal basis in the Balearics
The main legal reference is the consolidated BOE text of Legislative Decree 1/2014 of 6 June, approving the Balearic legal framework for state-transferred taxes.
https://www.boe.es/eli/es-ib/dlg/2014/06/06/1/con
- Article 10: General rates for real-estate transactions, special garage scale and certain reduced-rate scenarios.
- Article 14 quater: 100% regional relief for certain first-main-home acquisitions by eligible groups, subject to strict conditions.
- Article 15: General AJD 1.5% rate for qualifying notarised documents.
- Article 17: AJD 1.2% rate for certain first-main-home scenarios.
- Article 17 bis: Increased AJD 2% rate for certain qualifying transactions.
For practical filing support, ATIB provides Form 600 for self-assessment: https://www.atib.es/TA/Modelos/Modelo.aspx?m=600
Technical checklist before filing Form 600
This prior control reduces tax-classification, tax-base and applicable-rate errors.
Tax classification of the transaction
Confirm whether the correct framework is TPO or VAT + AJD.
Tax base and relevant value
Validate the correct tax base under the legal rule and real transaction structure.
Correct rate
Apply the general scale, garage-specific scale or AJD rate that actually applies.
Tax benefits
Check each legal requirement individually; never assume automatic eligibility.
Deadlines and filing
Verify filing deadlines, documentary support and data consistency in Form 600.
Technical FAQ on ITP/AJD in the Balearics
How do I know whether my purchase is taxed under TPO or VAT + AJD?
It depends mainly on whether the transfer is first delivery (typically VAT + AJD) or second transfer (typically TPO), with case-specific nuances.
Does the TPO scale apply only to homes?
No. It can also apply to commercial units, offices, warehouses, land and other real-estate assets.
Is the 1.2% AJD rate automatic for a first main home?
No. Article 17 requires specific value and ownership conditions and proper evidence.
What happens if I apply a tax benefit incorrectly?
The tax authority may reassess the transaction and claim additional tax plus interest.
Why should tax review be done before signing?
To identify risks early and ensure coherence between legal structure, tax treatment and Form 600 filing.
What is the Property Transfer Tax rate in the Balearic Islands when buying a second-hand property?
The purchase of a second-hand property in the Balearic Islands is generally subject to the transfer tax (TPO) regime. The rate is progressive: 8% up to €400,000; 9% from €400,000.01 to €600,000; 10% from €600,000.01 to €1,000,000; 12% from €1,000,000.01 to €2,000,000; and 13% above that threshold. Reduced rates may apply where the legal conditions for a primary residence are met.
How is Property Transfer Tax calculated in the Balearic Islands?
The tax is calculated by applying the relevant rate to the tax base, which is the actual market value of the property or the official cadastral reference value if higher than the declared price. The scale is progressive by bracket. The resulting amount is declared and paid via Form 600 filed with the ATIB.
What is the difference between ITP and AJD in the Balearic Islands?
ITP in its transfer tax modality (TPO) generally applies to the purchase of second-hand property. AJD (Stamp Duty on notarised documents) applies to registrable notarial deeds and is typically triggered on new-build purchases alongside VAT. They are distinct modalities of the same tax and, as a rule, do not accumulate on the same transaction.
When must Form 600 be filed in the Balearic Islands?
Form 600 must be filed, as a general rule, within one month of the taxable event, which ordinarily coincides with the date of the public deed. The filing is made with the ATIB (Agència Tributària de les Illes Balears). Late filing may trigger surcharges or, in some cases, a penalty procedure.
What taxes are payable when buying a property in Mallorca?
It depends on the type of property. For second-hand property, the buyer generally pays Property Transfer Tax at the Balearic scale. For new-build property sold by the developer, the buyer pays VAT (generally at 10%) and Stamp Duty on the deed. In both cases, notary, land registry and agency fees may also apply, although these are not taxes.
Correct tax setup avoids future costs
In relevant real-estate deals, a legal-tax review before signing reduces contingencies and improves transactional certainty.
Would you like us to review your case before completion?