FOR BUYERS

We strongly encourage buyers to use a highly recommended local lawyer (Javier James can recommend the most respected lawyers on the island) to represent you during the purchase process. Legal fees vary depending on the amount of work done, however a common fee is approximately 1% of the purchase price of the property (not including special services provided by the lawyer).

Costs may increase if the buyer decides to carry out additional searches such as a property valuation, special reports, mortgage costs, architect's costs, surveyor's costs or any type of additional legal services.

If you are resident in Spain, you must pay annual wealth tax on your worldwide assets. If you are a non-resident, only your Spanish assets will be subject to this tax. So this is always something to consider when buying property in Spain, particularly high-end properties. Wealth tax rates range from approximately 0.28% to 3.45%, depending on the value of the assets (please contact us for more information). This percentage may vary from year to year. Both Spanish residents and non-residents receive a personal tax allowance of 700,000 euros and, if you live in Spain, you receive an additional tax allowance of up to 300,000 euros for your main home. Resident couples with a property in joint names could have a total tax-free allowance of up to 2 million euros.

IMPORTANT: Annual Wealth Tax can be avoided by taking out a mortgage.
For more information, please contact us.

Every year you also have to pay the municipal tax known as Impuesto sobre Bienes Inmuebles (IBI) on residential property.

It is very important to think about your tax beneficiaries and what they would have to pay if they inherit the property. This tax is always due on Spanish property, regardless of where you and your heirs reside. The tax depends on who the beneficiary is and the amount inherited or donated.

IMPORTANT: Inheritance Tax can be avoided by taking out a mortgage. For more information, please contact us.

The cost will vary but is normally between 150€ and 200€ per year depending on the size of the property.

In the case that a mortgage is needed for the purchase of a house, it is necessary to take into account the expenses generated in relation to the application and development of a mortgage that will be paid to the bank. These are the appraisal, notary and registry fees related to the drafting of the mortgage loan contract. It is worth negotiating with the bank before signing the loan.

The administrator is the person who carries out the registration processes and the pending taxes. They do not charge a high cost, but it must be taken into account.

1. In the case of new homes:

Value Added Tax (VAT).

In this case, the buyer must pay VAT (value added tax) to the seller, 10% of the cost of the sale price. In the case of social housing, this is reduced to 4%. It is important to take into account if the property is to be sold with a garage or storage room (a maximum of two annexes) which will be around 10% of the property, if the garage or storage room is sold separately it will be 21%.

Tax of Patrimonial Transmissions and Documented Legal Acts (ITPAJD), in its modality of Documented Legal Acts.

The presentation of the contract to public deed is subject to this tax, which in the Balearic Islands is currently between 1.2% and 2% of the sale cost. State-subsidized housing is exempt from this tax.

2. In case of not being a new construction:

Taxes of Patrimonial Transmissions and Documented Legal Acts (ITPAJD), in its modality of Documented Legal Acts.

The buyer must pay it to the Balearic Treasury, the ITP (Impuesto de Transmisiones Patrimoniales) Alternative to the VAT when buying second hand properties. In the Balearic Islands it ranges between 4 and 13% depending on the amount of the property. There are also reduced costs for certain cases (social housing, large families, young people...).