The costs on top of the purchase price

The costs on top of the price in Spain are not a rounding error, and the largest of them depends on something most buyers do not think about until late: whether the property is a resale or a new build.

The two are taxed under entirely different regimes.

The calculator above gives you the order of magnitude. What it computes, and where it stops, is set out below — read both before you budget against its number.

About the figure the calculator gives

These guides do not print tax rates in the prose. A rate that is set regionally and revised every few years is wrong from the day it changes, with no way for a reader to tell.

A calculator cannot follow that rule; it has to compute. So the rule is honoured differently here: every rate it uses sits in one place in the source, carries the date it was last checked, and that date is printed beside the result. A stale rate becomes visible to you rather than hidden from you.

That makes the figure a sound planning number, and not advice. Before you sign, have it confirmed for your specific property by your lawyer or tax adviser.

Resale: transfer tax

Buy from a private owner and you pay ITP — Impuesto sobre Transmisiones Patrimoniales, transfer tax.

Two features matter.

It is set by the autonomous community, not by Madrid. The Balearic Islands set their own rates, and they differ from Catalonia’s or Andalusia’s. Guidance written about “Spain” without naming a region is not guidance about Mallorca.

And it is progressive by price band. The rate is not a single figure applied to the whole purchase — successive slices of the price are taxed at rising rates, which means the effective rate on an expensive property is higher than on a modest one, and neither equals the headline top rate.

The Balearic bands are published by the regional tax authority, ATIB, and they have been revised more than once in recent years. Applying the top rate to the whole price — the most common mistake in online estimates — overstates the bill substantially. The calculator applies the bands, which is exactly why it exists.

And the tax is charged on the reference value where that exceeds the price. See below.

The reference value

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

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

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

It can be checked at the cadastre before you make an offer, free of charge. If the reference value is higher than your price, enter that figure in the calculator rather than the price.

New build: VAT and stamp duty

Buy from a developer and ITP does not apply. Instead:

IVA — Spanish VAT — is charged on the price at the rate for residential property, set nationally.

AJD — Actos Jurídicos Documentados, stamp duty on the notarised deed — is charged on top, at a rate set by the Balearic government.

The combined figure for a new build usually lands in a similar region to the transfer tax on a mid-priced resale, though the two diverge at the extremes of the price range.

The fixed professional costs

These are broadly comparable whichever route applies.

The notary charges on a published tariff based on the deed value. The Land Registry charges on its own tariff to record the transfer — the step that makes your ownership effective against third parties. A gestoría commonly handles the tax filings and registration, for a modest fee.

Your lawyer is a separate cost and the one we would never encourage anyone to skip. A percentage of the price is common, though fixed fees are negotiable and often more sensible on an expensive property.

None of these individually is large against a Mallorca purchase price. Together they are real money, and none of them can be financed.

Costs the mortgage will not cover

Worth restating because it is where budgets break: Spanish lenders advance against the property price. The taxes and fees above are yours to fund from cash, on top of the deposit.

A buyer who calculated their deposit correctly and forgot this arrives at completion short. If you are financing, read this alongside mortgages for non-residents.

A planning figure

For budgeting before you have a specific property, a commonly used planning range is roughly ten to thirteen per cent above the purchase price, covering tax and all professional fees.

Treat that as a range for setting a search budget, not as a quotation. Where you fall inside it depends on the price band, on resale versus new build, and on what you agree with your lawyer. Once there is an actual property, the number can be calculated exactly — and it should be, before you sign anything.

And afterwards

The costs do not stop at completion. IBI falls due annually to the municipality, community charges apply in most developments, and as a non-resident owner you acquire annual filing obligations whether or not the property earns anything. Those are set out in non-resident property tax.

A property from our own portfolio to run the numbers on: the finca by Capdepera golf course — 114 m² on 2,200 m², restored in 2023, €849,000.

Frequently asked questions

How much does buying property in Spain cost on top of the price?

Roughly ten to thirteen per cent is a common planning range, covering transfer tax or VAT plus stamp duty, notary, Land Registry and legal fees. The precise figure depends on the price band and on whether the property is a resale or a new build.

What is ITP?

Spanish transfer tax, payable on resale property. It is set by the autonomous community — in Mallorca’s case the Balearic Islands — and charged progressively across price bands.

Do I pay VAT or transfer tax?

VAT plus stamp duty on a new build bought from a developer; transfer tax on a resale bought from a private owner. Never both.

Can I add the purchase costs to my mortgage?

No. Spanish lenders lend against the property price. Taxes and fees are funded separately, in cash, alongside the deposit.

Who chooses the notary?

The buyer normally does, and the fees follow a published tariff, so the choice is about convenience and availability rather than price.

What is the reference value?

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

Why does the calculator show a range rather than one figure?

Notary, Land Registry and gestoría charge on official tariffs that depend on the price and on the complexity of the deed — several buyers, a mortgage, a newly declared extension. A single figure there would be false precision.

Who pays what between buyer and seller?

Customarily the buyer carries transfer tax or VAT and stamp duty, the registry and the notary; the seller carries plusvalía municipal, the agency commission and their own gains tax. It is custom rather than law, and what the contract says is what applies.