Taxes over the life of a property
| Stage | Main taxes |
|---|---|
| Purchase | Transfer tax (ITP) on resale; VAT and stamp duty (AJD) on new builds |
| Ownership | IBI, waste tax, non-resident imputed income tax, possibly wealth tax |
| Rental | Income tax on rent; tourist tax collected from guests for licensed holiday lets |
| Sale | Capital gains tax, 3% retention for non-residents, municipal plusvalía |
| Death or gift | Inheritance or gift tax, plusvalía |
Purchase budget
The Balearic transfer tax is progressive, so the rate rises with the price, and reduced rates exist for some buyers of a main home. The tax base can be the cadastral reference value where it is higher than the price. We give you a written estimate before you commit: see purchase costs and taxes.
Non-resident owners
If you do not live in Spain, you file a non-resident return each year for the imputed income of a home that is not rented, at 19% for EU/EEA residents and 24% for others, on 1.1% or 2% of the cadastral value. If you rent, you declare the rent instead. We file the returns for you and receive notifications, so nothing is missed while you are away.
Wills and inheritance
Under the EU Succession Regulation, which Spain applies to everyone, you can choose the law of your nationality to govern your succession. A Spanish will limited to Spanish assets, consistent with your will at home, saves your heirs months. When an owner dies, we handle the acceptance of the inheritance before a Spanish notary, inheritance tax, plusvalía and registration in the heirs' names, or the sale of the property if they prefer.
Selling
For non-resident sellers we calculate the gain before you agree the price, collect the documents that reduce it and file the return to recover any excess retention: see selling as a non-resident.
Coordination with your advisers
Your country of residence may also tax the same income or gain, usually with credit for Spanish tax. We work with your accountant or tax adviser so both sides match. We are part of the Castell group in Palma; for other legal matters in English, see Castell.law.
Before you pay a deposit, ask a lawyer
Send us the listing or the document you have been asked to sign. An English-speaking property lawyer will tell you what needs checking and what it could cost you not to.
Questions about property tax and inheritance
Do I pay tax every year on my holiday home in Mallorca?
Yes. Non-residents pay an annual imputed income tax and the municipal IBI, even if the property is not rented.
Do my children pay inheritance tax on a Balearic property?
Children and spouses can benefit from a 100% bonus on Balearic inheritance tax if conditions are met, but the return must still be filed within six months.
Should I make a Spanish will?
Yes, if you own property in Spain. It should be coordinated with your will at home.
Can you file my tax returns while I live abroad?
Yes. We file and keep your obligations up to date throughout the year.