Buying property in Mallorca, step by step

Buying in Mallorca is not difficult. It is unforgiving of steps taken out of order.

The purchase itself follows a fixed sequence set by Spanish law, and most of what goes wrong for foreign buyers happens because something was signed before it was checked — not because the sequence is complicated. This is that sequence, and where the real risk sits in each part of it.

Before you look at anything

Two things are worth having before you start viewing, because both take longer than people expect and both become urgent at exactly the wrong moment.

The first is an NIE — a Spanish foreigner identification number. You cannot complete a purchase without one. It is not a residence permit and grants you nothing beyond the ability to transact, but no notary will sign a deed without it. Getting an NIE is administratively simple and logistically slow, so it belongs at the start.

The second is a budget that includes the costs on top of the price. Transfer tax, notary, registry and legal fees are not marginal in Spain. Plan on roughly ten to thirteen per cent above the purchase price — the calculator in what buying actually costs gives the range for your figure.

If you are financing, add a third: an agreement in principle. Non-residents borrow on different terms from residents, and the gap is large enough to change which properties are realistic. That is covered in mortgages for non-residents.

If you are buying from outside the EU

British buyers since Brexit, and American, Canadian, Australian and other non-EU buyers all along, are third-country nationals in Spain. Ownership is unaffected — there is no restriction on who may own Spanish property, and none on nationality — but three things follow, and all three are commonly missed.

Time on the island is capped. Ninety days in any rolling one-hundred-and-eighty is the Schengen limit for visitors. Owning a house does not extend it. If the plan involves longer stays, that is a visa question to settle before the purchase, not after.

Letting income is taxed differently. EU and EEA residents may deduct the costs of earning rental income; non-EU residents generally cannot and are taxed on the gross rent. For a property you intend to let, this materially changes the return.

Currency is a real cost line. A purchase settled in euros from an account in sterling, dollars or any other currency moves with the rate between the deposit and completion, and the spread a retail bank applies to a six-figure transfer is not trivial. Fix the mechanism early — a specialist transfer service or a forward contract — rather than discovering it on the day.

Reservation

When you find the property, the first document is usually a reservation agreement with a modest deposit. It takes the property off the market for a short, defined period.

The reservation is where discipline starts paying. It should state precisely what happens to your deposit if the checks below turn something up. A reservation that returns nothing under any circumstance is a reservation you should not sign.

The checks that actually matter

This is the part that separates a smooth purchase from an expensive one, and on Mallorca it has a local edge.

The nota simple is an extract from the Land Registry. It shows who owns the property, its registered description, and any charges against it — mortgages, embargoes, rights of way. It costs very little and is not optional.

Then the check we insist on, particularly on country property: does the built area on the ground match what is registered?

Rural Mallorca has a long history of extensions, pools and guest annexes built without permission and never declared. They are common enough that finding one is unremarkable. What matters is that legalising them afterwards is not always possible — some cannot be regularised at all, and you inherit the problem along with the house. Comparing the Land Registry entry, the cadastral record and the physical building is a morning’s work and occasionally saves a purchase.

Alongside that, four documents that decide whether the property is what it appears to be:

The cédula de habitabilidad, the occupancy certificate, which utilities and most letting arrangements depend on.

The energy performance certificate, which the seller must provide.

Community accounts and minutes, if the property sits in a complex. Minutes are where you find the special levy for the roof that was voted through last year and not yet charged.

Proof that IBI and community fees are paid. Arrears of both follow the property, not the seller — they become yours.

And finally the licence position on holiday letting. Licences are capped, they attach to the property rather than the owner, and not every property or municipality qualifies. Never buy on the assumption that one can be added later. Verify what exists before you commit, in writing.

The reference value

One number decides the tax bill and it is not the price you negotiate.

Since the reform of the tax base, the Spanish tax authority assesses transfer tax on the valor de referencia, a value set per property by the cadastre. Where it exceeds the agreed price, it is the reference value that is taxed.

The consequence is blunt: buying below the reference value does not reduce your tax. A bargain on price is not a bargain on tax.

It can be checked at the cadastre before you make an offer, at no cost. Where it looks implausibly high it can be challenged, but that is a process with time and expense attached, and your lawyer will tell you whether it is worth starting.

The deposit contract

Once the checks are clear, the private purchase contract follows — usually a contrato de arras, most often in its penitenciales form.

The mechanism is symmetrical and worth understanding. The buyer pays a deposit, commonly ten per cent. If the buyer walks away, the deposit is lost. If the seller walks away, the seller repays double. It is the point at which both sides are committed, and by then everything you wanted to check should already be checked.

There is no statutory cooling-off period of the kind English buyers may expect, and nothing resembling exchange-and-completion protection beyond what this contract itself provides. What the contract says is what applies.

Buying without being there

You do not have to be on the island to complete. A power of attorney granted to your lawyer — signed before a Spanish notary, or before a notary at home with an apostille and a sworn translation — lets the purchase proceed in your absence.

It is routine and widely used. It is also a document that hands someone else the authority to sign for you, so its scope should be drawn narrowly and for this transaction only.

Completion

Completion happens before a notary. The notary is a public official, not your representative — they verify identity, confirm the deed reflects what was agreed, and record the transaction. They do not act in your interest against the seller’s, which is why independent legal representation is separate and worth having.

The deed of sale (escritura pública) is signed, the balance is paid, and the keys change hands. The deed is then presented to the Land Registry, which is what makes your ownership effective against third parties.

One step that happens in the room and surprises buyers: if the seller is non-resident, you as buyer are required to withhold three per cent of the price and pay it to the Spanish tax authority on the seller’s account. It is not an extra cost to you, but it is your obligation, and your lawyer or gestoría handles it.

New build and off-plan

Buying from a developer follows a different tax route — VAT plus stamp duty rather than transfer tax — and adds one protection worth insisting on.

Payments made before the building is finished must be secured by a bank guarantee or insurance policy covering their return if the development is not delivered. Ask for the document, not the assurance. Check also what the completion date in the contract actually commits the developer to, and what happens if it slips.

After the keys

The purchase is not the end of the paperwork.

Transfer tax falls due within a defined period of the deed. The property must be transferred into your name for IBI, the annual municipal property tax, and for utilities and any community charges. And as a non-resident owner you acquire annual filing obligations in Spain whether or not the property earns anything — see non-resident property tax.

Two more worth doing while the file is open: make a Spanish will covering the Spanish asset, which simplifies succession considerably for your heirs, and put the utilities on direct debit from a Spanish account so a missed bill does not become a disconnection you discover in July.

Where we sit in this

We are advisers, not your lawyer. We coordinate the sequence, run the checks that are ours to run, and work alongside the lawyer and tax adviser you appoint. We are not paid by developers and hold no quotas, which is the only reason our view of a property is worth anything to you.

An example at the upper end: Sa Mesquida de Dalt, a historic estate near Capdepera on 40 hectares of undivided land, with an ETV rental licence in place.

Frequently asked questions

Can foreigners buy property in Mallorca?

Yes. There is no restriction on foreign ownership in Spain. You need an NIE, and the transfer is executed before a notary and recorded at the Land Registry. Nationality does not change the process, though it can change your tax position afterwards.

Does it matter which country I am buying from?

Not for your right to buy — there is none of the restriction on foreign ownership that some countries apply. It matters afterwards: non-EU residents, including British buyers since Brexit and American, Canadian and Australian buyers throughout, face the ninety-day visitor limit and generally cannot deduct costs against Spanish rental income.

What is the reference value and why does it matter?

A value set per property by the cadastre. Where it exceeds the agreed price, transfer tax is assessed on it rather than on what you paid. It can be checked free of charge before you make an offer.

Do I need a Spanish bank account?

Not strictly. In practice it makes payment, utilities, community fees and tax obligations considerably simpler, and most buyers open one.

How long does a purchase take?

From accepted offer to signed deed, six to ten weeks is typical where there is no mortgage and nothing unexpected in the registry. Financing adds time. A property with undeclared building work can add a great deal more, or end the purchase.

Can I buy without travelling to Spain?

Yes, through a power of attorney granted to your lawyer. It is routine. Draw its scope narrowly and limit it to this transaction.

Do I need a lawyer?

You are not legally required to have one. We recommend it on every purchase. The notary confirms the deed is correct; nobody in the room is checking that the deal is good for you unless you appointed them.

Can I let the property to holidaymakers?

Only with a valid tourist letting licence. Licences are capped, attach to the property rather than the owner, and are not granted on request. Confirm the position in writing before you commit, never afterwards.