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FAQS

Do you have questions about purchasing real estate, the process, or our services? Our frequently asked questions (FAQs) provide a concise and understandable summary of the most important information. Whether you need initial guidance or detailed information, you’ll find quick answers and valuable tips here.

Frequently asked
questions

  1. What is my budget for buying a property?
    Clarify in advance what budget is available to you. If necessary, check your financing options beforehand.
    Having this knowledge makes you flexible in any negotiation and saves both you and all parties involved a great deal of time.
  2. Apply for the Spanish foreigner identification number well in advance.
    The so-called N.I.E. is essential for all legally binding contracts, and the process from application to receipt can take considerable time.
  3. In which region do I want to buy?Identify early on which region best suits your needs.
    Ideally, you are already familiar with your preferred areas and have knowledge of key aspects such as local infrastructure.
  4. Contact a registered and recognised estate agent in the Balearic Islands – ideally someone who truly “speaks your language”.
    An experienced agent knows the regional property market and will find exactly what you are looking for. You’ll have a reliable expert at your side who will guide you through the entire purchasing process – and, ideally, continue to support you even after the purchase as a property owner in the Balearics.
  1. Property selection.
    Viewings and the selection of your dream property.
    At the latest by this stage, you should apply for your Spanish tax identification number (N.I.E.) at the nearest Spanish consulate.
  2. Reservation contract and private preliminary agreement (Contrato de Arras or Contrato de opción de compra)
    This agreement provides security for both parties. Typically, 10% of the purchase price is paid as a deposit.
    If the buyer withdraws from the contract, the deposit is forfeited. If the seller withdraws, the buyer is entitled to a refund of double the amount paid.
  3. Financing confirmation.
    The bank reviews all documents and approves the mortgage.
  4. Notary appointment and completion of purchase.
    Escritura de compraventa: Official purchase deed signed before a notary.
    Final payment is made and the keys are handed over.
  5. Land registry entry and additional costs.
    Registration of the property in the official Land Register (Registro de la Propiedad).

The additional purchase costs of a property in Mallorca can amount to between 10% and 15% of the purchase price.
Here are the main costs associated with purchasing property in the Balearic Islands:

  1. Notary fees:
    These fees for the notarisation of the purchase deed generally range between 0.5% and 1% of the purchase price.
  2. Property Transfer Tax (Impuesto de Transmisiones Patrimoniales, ITP):
    Property transfer tax in Mallorca is levied on the actual purchase price of the property. It is generally calculated based on a graduated rate that varies between 7% and 11% depending on the purchase price.
    A lower rate may apply to the portion of the purchase price up to a certain amount (e.g., €400,000).
    A higher rate applies to the portion of the purchase price that exceeds this amount.
    The ITP must usually be paid within a certain period of time after the purchase, often within 30 days.
  3. Property Tax (Impuesto sobre Bienes Inmuebles, IBI):
    This annual tax is levied on the value of the property and varies depending on the municipality.
    The tax rate is based on the property’s cadastral value (valor catastral).
  4. Legal fees:
    If you choose to appoint a lawyer, you should expect additional costs of approximately 1% to 2% of the purchase price.
    We would be happy to provide you with our personal recommendations.
  5. Land registry fees:
    The cost of registering the property in the Land Register is usually around 0.1% to 0.5% of the purchase price.
    This task is typically handled by the gestoría associated with the notary’s office.
  6. Other fees:
    These may include costs for translations, powers of attorney, or other professional services.

N.I.E. number stands for Número de Identidad de Extranjero.

This foreign tax identification number must be applied for at the nearest Spanish consulate to your place of residence and is required, among other things, for the payment of taxes.
Without an N.I.E. number, you cannot purchase property, sign utility contracts, or complete other essential legal procedures.

No, there are generally no specific restrictions for foreign nationals from the European Union when purchasing property in Spain, including Mallorca.
Foreign buyers are simply required to obtain a so-called N.I.E. number (Número de Identificación de Extranjero) from the Spanish consulate, which is necessary for all legal and tax-related matters.

Financing a property in Spain, including Mallorca, is also possible for foreign buyers.

Here are the key points:

  • Spanish mortgages:
    Many Spanish banks offer mortgages to foreign buyers, typically covering up to 60–70% of the property’s value.
  • Terms and interest rates:
    Loan terms of up to 25 years are common. Interest rates may be either variable or fixed.
  • Required documents:
    • NIE number (Foreigner Identification Number)
    • Proof of income (pay slips, tax returns)
    • Bank statements
    • Proof of equity (at least 30–40% of the purchase price)

There is a wide range of property types available to suit a variety of needs:

  • Fincas: Traditional country houses, often with large plots of land and rural charm.
  • Villas: Luxurious properties, often featuring sea views, a pool, and modern design, particularly popular in coastal areas.
  • Apartments: Ranging from compact studios to spacious penthouses – especially common in Palma and other urban areas.
  • Townhouses: Charming, often historic homes located in the villages and towns of Mallorca.
  • New developments: Modern apartments and houses built to the latest standards.
  • Investment properties: Real estate intended for holiday rentals or long-term investment.

The notary plays a central role in the property purchase process in Mallorca and has several important responsibilities:

  1. Certification of the purchase contract: The notary drafts and certifies the purchase agreement, ensuring that all legal requirements are met and that the contract is legally valid.
  2. Verification of ownership: The notary checks the property’s ownership status in the Land Register to ensure that the seller is the legitimate owner and that there are no encumbrances or mortgages on the property.
  3. Advising the parties: The notary informs both parties of their rights and obligations under the purchase agreement and ensures that all terms are clear and fully understood.
  4. Ensuring payment: The notary ensures that the purchase price is properly transferred, often by arranging payment through a trust or escrow account.
  5. Land register entry: After the purchase contract has been notarised, the notary’s gestoría handles the registration of the new owner in the Land Register, which legally documents the transfer of ownership.
  6. Preparation of documents: The notary prepares the necessary deeds and documents required for the purchase and the subsequent registration in the Land Register.

The role of the notary is essential to ensure a smooth and legally secure purchase process.

The Spanish Certificate of Habitability (Cédula de Habitabilidad) is an official document that confirms a property meets the minimum requirements to be considered suitable for living.
In the Balearic Islands, it must be renewed every 10 years.

The Energy Certificate (Certificado de Eficiencia Energética) is an official document that assesses the energy efficiency of a building.
It is legally required in Mallorca and throughout Spain for the sale or rental of a property.

If the property already has an existing holiday rental licence and is registered with an identification number for short-term rentals
(since 2 January 2025, all holiday and short-term rental providers in Mallorca are required to register in a unified nationwide registry),
you may offer your property for holiday rentals, provided you comply with the applicable regional tax regulations.

New holiday rental licences have not been issued since 2022.
Currently, the authorities are intensifying efforts to combat illegal holiday rentals. Between June and November 2024, more than 2,500 inspections were carried out, resulting in 245 penalty proceedings with fines totalling over €4.4 million.
For owners of single-family homes with existing licences, the situation remains unchanged for the time being.

The property market in Mallorca has undergone a remarkable transformation over the past 20 years.
Following the 2008 financial crisis, the market began to recover steadily from 2012 onwards. Since then, high-end properties in prime locations have experienced significant price increases.
As of January 2024, the average price per square metre for holiday properties on the island stood at approximately €5,800, representing a 1.7% increase compared to the previous year.
The luxury segment saw an even more substantial rise, with prices increasing by 13% in 2023 alone.
Demand continues to outpace supply, particularly in the premium sector, leading to an ongoing shortage of available properties.
Experts predict that this upward trend is likely to continue in the coming years.

Regional differences shape the market:
The southwest of Mallorca remains the island’s most expensive region, followed by Palma de Mallorca.
Since 2015, property prices across the island have increased by an average of 55%, with Palma City seeing a rise of as much as 78%.
This trend highlights Mallorca’s attractiveness as an investment destination and the long-term stability of its property market.
Contributing factors include strong demand from international buyers, the limited availability of building land, and increasingly restrictive legislation — all of which continue to drive prices upward.
Despite global challenges, the Mallorcan property market has proven to be robust, offering appealing opportunities for both investors and private buyers.
(Source: EQS-News.com)

There are several areas in Mallorca that are classified as “inundable” or flood-prone.
These zones are marked on official maps that are regularly updated.
Some of the areas identified as being at risk of flooding include:

  • Palma: There are several flood-prone zones in this area, including the slopes of Na Burguesa, the Torrents de Bàrbara and Gros, as well as the Prat de Sant Jordi area.
    These zones include neighbourhoods such as Son Castelló, Son Malferit, Son Llàtzer Hospital, Es Rafal, Es Vivero, Sa Indioteria, Es Molinar, Sa Gruta, and Ciutat Jardí.
  • Marratxí: The Torrent de Coanegra is a well-known example of a flood-prone area in this municipality.
  • Campos: This area contains numerous plots of land located within designated flood-prone zones.
  • Santa Ponça and Peguera: These tourist areas are also known to be at risk of flooding.

Property Tax (IBI – Impuesto sobre Bienes Inmuebles)

Payable annually to the local municipality

Amount: 0.4% to 1.1% of the cadastral value

Non-Resident Income Tax (IRNR – Impuesto sobre la Renta de No Residentes)

Form 210 → To be submitted quarterly or annually to the Spanish Tax Agency (Agencia Tributaria)

Without rental income: 19% (EU citizens) or 24% (non-EU citizens) on a notional rental income (~1.1% of the cadastral value)

With rental income: 19% (EU citizens) or 24% (non-EU citizens) on rental income (EU citizens may deduct allowable expenses).

Property Transfer Tax (ITP – Impuesto sobre Transmisiones Patrimoniales)

8–11% (progressive rate based on the purchase price)

Instead of ITP, VAT (IVA) of 10% is paid on the purchase price
and
Stamp Duty (AJD) of 1.5% is applied to the purchase price

Actos Jurídicos Documentados (AJD) is a tax on notarial deeds, documents, and official contracts in Spain.
Purchase of new-build properties
Mortgage registration (for entry into the Land Register)

In the Balearic Islands, the stamp duty is 1.5% of the purchase price of a new-build property.

For mortgages, the tax is based on the amount registered.

Online via the Agencia Tributaria (www.agenciatributaria.es)
By bank transfer or direct debit
Through a gestoría or tax advisor in Mallorca.

A gestoría is a Spanish administrative office that handles bureaucratic and tax matters for individuals and businesses.

This question depends on the individual situation.
A gestoría or a tax advisor can be very helpful in ensuring that the annual tax obligations related to the property are fulfilled on time.

Similarly, an informational meeting before purchasing property can provide clarity on which regional tax laws apply to the purchase, inheritance, or gifting of property, and what personal consequences this may have for you.

We would be happy to assist you in finding a tax advisor or a gestoría.

Get in touch now.

We would love to get to know you – and look forward to hearing from you.

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