ITP and Property Transfer Tax on Mallorca

Anyone buying a resale property on Mallorca generally pays the Spanish property transfer tax ITP. This refers to the Transmisiones Patrimoniales Onerosas modality within the Impuesto sobre Transmisiones Patrimoniales y Actos Jurídicos Documentados, or ITPAJD for short. The calculator above this article helps estimate the general ITP burden for properties on Mallorca based on the current Balearic rate schedule.

What is ITP on Mallorca?

ITP is the tax on onerous asset transfers. For property purchases on Mallorca, it mainly applies to buying a used apartment, finca, villa or house. The buyer is generally liable for the tax, not the seller. The responsible authority is the Balearic tax agency ATIB, because the property is located in the Balearic Islands.

When does ITP apply?

ITP typically applies when a resale property on Mallorca is sold. No ITP in the TPO modality is normally due when buying a new property directly from a developer as a first transfer. In that case, IVA is charged instead, plus usually AJD on the notarial deed.

Current ITP rate schedule on Mallorca

For properties on Mallorca, the ITP regulation of the Autonomous Community of the Balearic Islands applies. The general tax is calculated progressively:

The calculator above uses this progressive logic: not the entire purchase price is taxed at the highest rate, but only the respective portion within each bracket.

Example calculations

The following examples show how the progressive ITP rate schedule is applied in practice. The key point is: each bracket is only calculated on the respective portion.

Tax base: Purchase price or Valor de Referencia?

Since 2022, the Valor de Referencia of the Cadastre has been decisive for Spanish properties. For ITP, the higher value is generally applicable: purchase price, declared value or Valor de Referencia. So if the purchase price is €650,000 but the Valor de Referencia is €700,000, the ITP calculation should generally be based on €700,000.

The Valor de Referencia is not the same as the classic cadastral value for the IBI property tax. It is determined annually by the Cadastre based on notarial and registered market data and can be queried via the electronic cadastral office.

Resale property vs. new build

Resale property: The classic resale of a property on Mallorca is regularly subject to ITP. The tax is declared and paid by the buyer via Modelo 600 to the ATIB.

New build from developer: For the first transfer of a new apartment or house by the developer, IVA generally applies. For residential properties, the IVA rate is generally 10%, and 4% for certain publicly subsidised housing. Additionally, AJD is usually due on the notarial deed.

ITP, IVA and AJD: the main differences

• ITP: applies to resale properties and non-VAT-taxable onerous transfers.
• IVA: applies to new properties from developers, i.e. the first transfer.
• AJD: applies to certain notarial deeds. For new build purchases with IVA, AJD is effectively the additional stamp duty item.

In the Balearic Islands, AJD for new, IVA-taxable property purchases is generally 1.5%. For certain acquisitions of a main residence up to €270,151.20, the ATIB states a reduced AJD rate of 1.2%, provided the conditions are met.

Special cases and reduced rates

The general rate schedule is the standard case for many international buyers. In addition, there are Balearic concessions that are closely tied to personal conditions.

• 4% for certain main residences: possible when acquiring a main residence up to €270,151.20, if the conditions are met.
• 2% for certain buyer groups: including buyers under 36 years for their first main residence as well as in certain family or disability cases.
• 100% bonus: for certain first main residences of young buyers under 30 years or persons with a disability of 33% or more, subject to additional conditions.
• Garages separately: for independent garages, the ATIB applies a separate schedule of 8% up to €30,000 and 9% above.

These concessions are not blanket discounts. They must be checked on a case-by-case basis and correctly declared.

Modelo 600 and payment deadline

ITP and AJD are declared in the Balearic Islands using Modelo 600. The ATIB sets a deadline of one month from the date of the legal transaction or notarial deed for payment and submission.

FAQ

Is ITP on Mallorca the same as German property transfer tax?

Functionally yes: ITP is the main acquisition tax item for buyers of resale properties. Legally, however, it is part of the Spanish ITPAJD system.

What ITP rates currently apply on Mallorca?

The general rate schedule ranges from 8% to 13%: 8% up to €400,000, 9% for the portion up to €600,000, 10% for the portion up to €1,000,000, 12% for the portion up to €2,000,000 and 13% above that.

Does ITP also apply to new builds?

For a classic new build purchase directly from a developer, ITP in the TPO modality does not normally apply, but rather IVA plus AJD.