Costs when buying a property

When buying a property on Mallorca, there are various costs that have to be added to the purchase price. It is important to know these costs in advance and to take them into account when planning your budget. Basically, the rough rule of thumb applies: Purchase price + 10%-12% incidental purchase costs.

1. Real estate price: The purchase price varies depending on the location, size and condition of the property. It is advisable to conduct a thorough market analysis and seek professional help to determine the fair price.
2. Real estate transfer tax: Land transfer tax is due on the purchase of a second-hand property and is payable on a sliding scale of 8%-12.5% depending on the purchase price. Since 01.01.2022 on the higher value of purchase price or cadastral value.
3. Value added tax (IVA): When buying a new property, value added tax (IVA) is due instead of land transfer tax. The regular rate is currently 10% on the purchase price.
4. Notarisation/stamp duty: 1.5% (since 01.01.2020) of the sales price is due if the sale is subject to VAT, which must be paid within 30 days. The payment of this tax is a prerequisite for the registration of the notarial deed in the land register. Since 01.01.2022 on the higher of purchase price or cadastral value.
5. Notary: The costs of the Spanish notary are based on a binding fee table and amount to between 0.1 % and 0.3 % of the purchase price. These costs are usually borne by the buyer.
6. Land register entry: The costs associated with the registration of the property in the land register are also almost always paid by the buyer and calculated in proportion to the purchase price stipulated in the purchase contract. For the property register, one should calculate with fees between 0.1 % and 0.2 % of the notarised purchase price.
7. Legal advice/lawyer: If a lawyer is commissioned with the sale of the property, who takes care of the contractual issues, an expense of up to 1% of the sale price may be due.
8. Tax office/Gestoria: For the settlement of the tax debt through the sale, it is advisable to involve a gestoria or a tax office. Here, as a rule, the bill is calculated on a time and material basis.
9. Other costs: Other costs may be incurred, such as for the certification of documents, translations, a building survey if necessary or financing/mortgage.

It is important to consider all these costs in order to set a realistic budget for buying property in Mallorca. It is recommended to be well informed in advance and to seek professional assistance to avoid unexpected expenses and to ensure a smooth buying process.