Buying a house in Mallorca for more than two million euros: the 13% band, the reference value and wealth tax from year one

The scale, band by band

On a resale, the buyer pays the Balearic transfer tax, ITP, on a scale set by Balearic law: 8% on the first 400,000 euros, 9% up to 600,000, 10% up to one million, 12% up to two million, and 13% on whatever is above two million. Up to two million the scale gives 210,000 euros. A house at 2,500,000 euros therefore pays 275,000, an average of 11%, and one at 4,000,000 pays 470,000, an average of 11.75%. The 13% is a marginal rate: it is charged only on the part above two million.

A new build bought from a developer carries 10% VAT and 1.5% stamp duty instead, and the scale does not apply. Notary, registry and legal fees come on top in both cases.

Buying jointly does not lower it

Couples often buy in equal shares expecting each half to fall into a lower band. It does not. Balearic law applies the scale to the value of the whole property, works out the average rate that results, and applies that average rate to the share each buyer acquires. For a house at 3,000,000 euros the scale gives 340,000 euros, an average rate of 11.33%, so two spouses buying half each pay about 170,000 euros each, 340,000 in all, exactly what a single buyer would pay. Taxed band by band on each half separately, the total would have been 300,000.

The reasons to buy jointly lie elsewhere, in succession and in wealth tax, which is personal and is charged on each person's own net assets.

The base is the reference value, not always the price

The tax is not charged on the price alone. For a property, the base is the reference value that the Cadastre assigns to it on the day of the deed, unless the price or the value declared by the parties is higher, in which case the greater figure is the base. The Cadastre sets the reference value from the prices of sales made before notaries and publishes it through its electronic office, where it can be consulted and certified by cadastral reference.

On a high-value house the difference matters, because everything above two million is taxed at 13%. At a price of 2,400,000 euros the tax is 262,000. If the reference value is 2,800,000, the tax is 314,000: every euro by which the reference value exceeds the price costs 13 cents. Ask for the reference value before signing the deposit contract and put the difference into your offer.

If you think the reference value is wrong, the law allows two routes only: appealing the assessment the tax office issues, or asking for the self-assessment to be rectified. In both cases the tax office decides after a binding report from the Cadastre, and you generally pay first and recover afterwards if you succeed.

Wealth tax counts from the first 31 December

Wealth tax is charged on what you own in Spain on 31 December, so a house bought before the end of 2026 is in the base for 2026, with the return filed in the spring of 2027. Real estate is valued at the highest of three figures: the cadastral value, the value the tax office has established for other taxes, or the price paid. In the first year, and in every year after, the price you paid is therefore a floor, and for most houses it is far above the cadastral value. Debts taken on to buy the property are deductible for a non-resident.

A non-resident can apply the Balearic rules, with an exempt amount of three million euros, by electing them in the return. Between two and three million euros nothing is normally payable, but a Tax Form 714 is due by 30 June because that is where the election is made. Above three million, wealth tax starts to be payable and the State solidarity tax on large fortunes comes into play, which can take back part of what the Balearic threshold saves. The cap on combined liability can reduce the bill again. It has to be modelled with your other Spanish assets, bank balances included, before you sign.

Before you sign the deposit contract

• Get the cadastral reference of the property and its reference value, and compare it with the price.
• Work out the transfer tax on the higher of the two figures and include it in your offer.
• Decide before signing whether to buy alone, jointly or through a company. Joint ownership does not lower the transfer tax but it changes wealth tax and succession, and a company adds cost and does not remove wealth tax.
• Model the first wealth tax return, with the Balearic election, using the price as the value of the property.
• Arrange the NIE, the source of the funds and, if you will not attend the deed, a power of attorney.

We calculate the tax on the higher figure, review the deposit contract and the deed, and model the first wealth tax return as part of our buying and selling service. How wealth tax works for a non-resident is on our wealth tax page, and the wider picture is in Is Mallorca a tax haven?

Sources: Article 10 of the Balearic Decreto Legislativo 1/2014 (transfer tax scale, average rate); article 10 of the consolidated Transfer Tax Act (Real Decreto Legislativo 1/1993), base and reference value; Ley 19/1991 on wealth tax, article 10 on the valuation of real estate and the rule on debts for non-residents; Cadastre electronic office, reference value; Tribunal Supremo judgments 1372/2025 and 1402/2025 on the cap on combined liability; Ley 38/2022, temporary solidarity tax on large fortunes.

This page is general information and reflects the rules in force on the date shown. It is not advice and does not replace an assessment of your own case.