{"id":900,"date":"2026-09-03T11:44:30","date_gmt":"2026-09-03T11:44:30","guid":{"rendered":"https:\/\/www.balearic-properties.com\/living\/?p=900"},"modified":"2026-09-18T22:09:23","modified_gmt":"2026-09-18T22:09:23","slug":"tax-considerations-for-foreign-buyers","status":"publish","type":"post","link":"https:\/\/www.balearic-properties.com\/living\/guides\/tax-considerations-for-foreign-buyers\/","title":{"rendered":"Tax considerations for foreign buyers"},"content":{"rendered":"

Tax information checked: 18 September 2026. Balearic regional purchase-tax figures below have been cross-checked against the current Ag\u00e8ncia Tribut\u00e0ria de les Illes Balears (ATIB) guidance and the June 2026 legislative update. Tax treatment depends on personal circumstances; independent advice remains essential.<\/em><\/p>\n

Buying a home in Mallorca, Ibiza or Menorca is refreshingly open to international buyers \u2014 there
\nare no restrictions on foreign ownership, and the purchase process itself is well established. What
\ncatches many buyers off guard is not the purchase itself, but everything the Spanish tax system
\nexpects from them afterwards: the taxes due at completion, the ones due every single year they own
\nthe property, and the ones due if they eventually sell. This guide sets out what those actually are.<\/p>\n

This is general information, not personalised tax advice. Rates and thresholds are reviewed
\nperiodically by both the national and Balearic tax authorities \u2014 always confirm current figures with
\nan independent tax advisor (asesor fiscal) or gestor before signing anything.<\/em><\/p>\n

1. Taxes due when you buy<\/h2>\n
\n

Location Matters as Much as Tax<\/h2>\n

Tax rules may be island-wide, but the property market is highly local. Before choosing a home, compare North Mallorca<\/a>, Southwest Mallorca<\/a>, Palma<\/a>, Central Mallorca<\/a> and the other Balearic Properties area guides<\/a>. For current context, see our Mallorca property price comparison<\/a>.<\/p>\n<\/div>\n

For a step-by-step walkthrough of the purchase itself \u2014 NIE number, reservation contract, arras<\/em>,
\nnotary completion \u2014 see our Balearic Islands Buying Guide<\/a>.
\nThis section focuses only on what you pay to whom.<\/p>\n

Resale property: Impuesto de Transmisiones Patrimoniales (ITP)<\/h3>\n

Resale homes in the Balearic Islands are taxed under ITP, a regional transfer tax applied on a
\nprogressive scale rather than a single flat rate. As checked in September 2026, ATIB publishes the following general progressive scale for transfers of real estate. See the current ATIB ITP rates<\/a>:<\/p>\n\n\n\n\n\n\n\n\n\n
Portion of the price<\/th>\nRate<\/th>\n<\/tr>\n<\/thead>\n
Up to \u20ac400,000<\/td>\n8%<\/td>\n<\/tr>\n
\u20ac400,000 \u2013 \u20ac600,000<\/td>\n9%<\/td>\n<\/tr>\n
\u20ac600,000 \u2013 \u20ac1,000,000<\/td>\n10%<\/td>\n<\/tr>\n
\u20ac1,000,000 \u2013 \u20ac2,000,000<\/td>\n12%<\/td>\n<\/tr>\n
Above \u20ac2,000,000<\/td>\n13%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The tax is calculated by tramos \u2014 each portion of the price is taxed at its own bracket rate, not
\nthe whole price at the top rate. Reduced rates and bonifications exist for qualifying purchases of a habitual home, but the eligibility rules are specific. Following the June 2026 changes, ATIB confirms that the maximum property-value threshold used for certain housing tax benefits is \u20ac331,859.70 in Mallorca and Menorca and \u20ac378,211.68 in Ibiza and Formentera for taxable events from 14 June 2026. The benefit itself may apply only to a defined portion of the tax base and depends on conditions such as age, first-home status or family circumstances. See the ATIB June 2026 update<\/a> and confirm eligibility with your advisor before relying on a reduced rate or bonification.<\/p>\n

New-build property: IVA + AJD<\/h3>\n

New-build homes bought directly from a developer are taxed differently: 10% VAT (IVA) plus AJD
\n(stamp duty), generally 1.5% in the Balearic Islands \u2014 together broadly in line with what’s outlined
\nin our Buying Guide. Reduced AJD rates and exemptions can apply to specific categories of buyer, so
\ntreat this as a starting estimate rather than a quote.<\/p>\n

Other one-off costs<\/h3>\n

Budget separately for notary fees, land registry fees and your lawyer’s fees \u2014 together these
\ntypically add another 1\u20132%, on top of the tax itself.<\/p>\n

2. Taxes due every year you own the property<\/h2>\n

This is the part that surprises many overseas owners: even if you never rent the property out, a
\nnon-resident owner can still have an annual Spanish tax liability, through imputed rental income.<\/p>\n

IBI \u2014 the local property tax<\/h3>\n

Impuesto sobre Bienes Inmuebles is the Spanish equivalent of council tax, billed annually by the
\ntown hall (ayuntamiento) and based on the property’s cadastral value. The rate is set locally, so it
\nvaries by municipality \u2014 your notary or gestor will confirm the exact amount for the specific
\nproperty before completion.<\/p>\n

IRNR \u2014 non-resident income tax<\/h3>\n

If you’re not a Spanish tax resident, you must file an annual non-resident tax return (Modelo 210)
\neven when the property earns no income. Spain treats a second home as generating “imputed income” \u2014
\na notional rent set at 1.1% of the property’s cadastral value (2% if that value hasn’t been officially
\nrevised in the last decade or so) \u2014 and taxes it accordingly:<\/p>\n