Buying property in Mallorca. FAQ

Are there restrictions on foreigners purchasing property in Mallorca or any other part of Spain?

No. Any person is able to own a property in Spain, as long as he/she fulfills the Money Laundry regulations. It is very interesting to mention that for non EU-citizens, if they buy a property, making an investment of more than half a million euros, they can obtain a residence visa, called “the golden visa”, equivalent to the US green card.

Are real estate transactions in Mallorca typically handled by a notary or lawyer, and what is the cost for such services?

Both Lawyers and Public notaries are involved in real estate transactions in Mallorca.
On top of the purchase price, the purchaser should add approx. 10% additional for taxes and expenses

Buyer’s lawyer check the ownership of the properties, charges and encumbrances, deal with vendor’s lawyer regarding way of payment, prepare the contract and the most important: check the legality of the property.

Then the purchase deed has to be signed in front of a Public Notary to be registered in the Property Registry. In the Spanish system Property Registry only inscribes notary deeds.

The fees of the Notary depend on the purchase price of the property.

Note in Mallorca the prices of properties vary from 180.000 euros for small apartment to 10 million euros or more for a luxus single family house with pool in a privileged area.

The Chamber of Lawyers of Balearic Island recommend their associates to invoice 1% of the purchase price + VAT (21%), but sometimes the fees are higher because the lawyer’s fees depend on the purchase price of the property, the complexity of the deal and the effective work done. Note that sometimes it is necessary to establish a company structure to minimize in a legal way the tax impact of the purchase, in order to optimize the wealth and the inheritance tax, among others.

I always recommend our clients to close a budget prior to hiring our services.

When buying a property in Mallorca, who pays for the notary and/or lawyer (buyer, seller or both)?

When buying a property in Mallorca all the expenses of the purchase are usually paid by the buyer except the “Plusvalía municipal”, which is a municipal tax related to the increase of value of the plot on the time the vendor has been owning the property.

That means the buyer will pay the notary, property registry, lawyer’s fees and transfer tax

Lawyer: Each party hire and pay his own lawyer.

Contract has to be negotiated and a lawyer may not be able to represent both interests. So each one pays his lawyer.

What are the costs paid by the buyer?

The tax issue when buying a property in Mallorca is the following:
There are two escenarios:
a) A new property being sold, the buyer pays on top of the purchase price 10% VAT plus 1.2% Stamp Duty Tax.
b) Second hand property. In this case buyer pays transmission tax, ITP (Impuesto de Transmisiones Patrimoniales).
This tax is progressive and has to be calculated step by step
For the tranche from 1 euro to 400.000 euro euros buyer pays 8%. From 400.001 to 600.000 euros, buyer pays 9%, from 600.001 to 1.000.000 euros buyer pays 10%, and up to 1.000.000 buyer pays 11%

So, transmission tax for 185.000 euros will be 14.800
And transmission tax for 2.350.000 euros, will be 238.500 euros

Besides this, the buyer will pay Notary and Property Registry fees, depending of the purchase price, but all together start from 600 euros, raising up depending on the purchase price.
Then 1% of purchase price + VAT cover lawyer’s fees

Can foreigners obtain mortgages to buy a property in Mallorca? How easy or difficult?


Yes they can and in fact it’s very common client ask the Lawyer to help getting a mortgage to buy a property in Mallorca.
Getting a mortgage depends of the negotiation with bank but normally foreign will get only 60% to 70% of the highest value between purchase price and valuation price. Local people can obtain up to 80%.

Despite of this foreign, as locals too, have to prove their solvency, this means they will be able to pay the mortgage’s installments.
So the borrower of the loan hast to present to the bank the last 2 yearly income tax declarations and the last 6 month of payrolls, bank movements, certificate of debts, certificate of other mortgages or loan, tax payment of last year and any other document that helps bank to prove buyer will be able to attend the quotas.
The process for foreign citizens is more or less similar to locals. The difference is all documents has to be translated into Spanish or English.
No. Basic rules are the same. There are only some minor differences in the taxation in the 15 regions of Spain

Are there any special laws about acquiring real estate in Mallorca different from the rest of Spain?

Yes, in Balear Islands there is something essential: The war against illegal constructions, mainly in Mallorca.

After 50 years of laxity with illegalities, now Mallorca’s government (Consell de Mallorca) has taken very seriously this matter and they have decided to battle new illegal constructions; they are searching for those illegalities done on the last decades.

The recently created corporation called “Agencia de Defensa del Territory” Territory Defense Agency, who acts as a building police looks for those illegalities. If the illegality has not prescribed they order the demolition and if it has prescribed they open a file and the owner will never be able to get a license on the property unless legalizes the illegal parts.

The fact is that thousands of properties have some illegal part or some are 100% illegal.
Problems comes when one of those properties enter into the market for being sold and the purchaser is not correctly informed from the vendor or the Real Estate Agency about the existing legalities of the property.
So, the purchaser sometimes is pushed to sign a contract in a very short period of time under the pressure there is someone else interested in buying the same property the purchaser is looking at, and the purchaser feels being in a middle of a race.

You may imagine the situation: the vendor tries that the buyer signs a document declaring that he/she knows and accepts the legal situation of the property in order to avoid problems. Some Real Estate Agencies usually don’t do a proper research about the illegalities and push to speed up the process in order to avoid loosing the deal and their commission.
And in the middle of this mess, despite I’m a Lawyer I feel I’m a detective who has to find out hidden illegalities, in order to inform properly my client about the legal status of the property.
In this process we always check all the documentation of the property and we inspect it personally, in order to reconfirm that what’s written on the documents match with the reality.

Final recommendations to buy in Mallorca to summarize.


.- Be on the safe side and get an independent advice. Avoid any adviser recommended by the selling party.
.- In this adventure rush is your enemy, so take your time. In many cases vendor promises there is someone else interesting in buying the property. This is a way to push the purchaser to stop investigating and sign the contract as soon is possible.