Buying property in Mallorca: a legal guide for foreign buyers

The safest order for a Mallorca purchase

1. Prepare: NIE, a Spanish bank account or payment route, evidence of the origin of funds and, if you will be abroad, a power of attorney. See NIE, power of attorney and bank account.
2. Preliminary check: before any reservation, your lawyer reviews the Land Registry extract, the cadastral data and the reservation document.
3. Reservation: a short exclusivity period, with a fee that is refundable if the legal checks fail.
4. Full due diligence: title, charges, licences, planning, debts, community and tourist licence.
5. Arras or private contract: deposit, conditions, deadlines and costs.
6. Completion at the notary, payment of taxes and registration of the deed.

What legal due diligence should cover

Check	Why it matters in Mallorca
Land Registry extract	Confirms the owner and reveals mortgages, seizures and easements
Cadastre and survey	Built areas often differ from the registry after decades of works
Planning and licences	Unlicensed pools, annexes and extensions are common in villas and fincas
Rustic land category	Decides whether you can extend, renovate or legalise
Debts	Unpaid IBI and community fees can follow the property
Tourist licence	Holiday letting needs a valid licence; apartments cannot get new ones

For villas and fincas, the review is broader: see villa due diligence and rural property in Mallorca. For flats, read the Palma apartment checklist.

Reservation, arras and purchase contracts

Agents often ask for a reservation fee within days. The document should say who holds the money and that it is refunded if the checks are not satisfactory. The arras contract that follows usually involves a deposit of around 10% under article 1454 of the Civil Code: if you withdraw you lose it; if the seller withdraws they return double. Conditions for a mortgage, a licence or military authorisation must be written into the contract. Read reservation and arras contracts in Mallorca.

NIE, power of attorney and completion

At completion, buyer and seller sign the deed before a notary, the price is paid by banker's draft or transfer and the keys are handed over. If the seller is not resident in Spain, the buyer withholds 3% of the price for the tax authority. With a power of attorney, your lawyer can do all of this for you. See what happens at the notary.

Taxes and the real acquisition budget

Resale properties pay Balearic transfer tax on a progressive scale; new builds sold by a developer pay VAT and stamp duty. Add notary, Land Registry, legal and technical fees, and, if you borrow, valuation costs. The tax base can be the cadastral reference value if it is higher than the price. Our guide to Mallorca purchase costs and taxes explains how to budget.

After the keys

Once the deed is registered, change the IBI, utilities and community records into your name and set up direct debits. Non-resident owners file an annual non-resident tax return. Our property team is in Palma; read about our work in Mallorca, and for other legal matters in English see Castell.law.