04 · What the Tax Office Takes When You Buy
*No single line item in your purchase costs weighs as heavily as the transfer tax. In this chapter we put the Balearic ITP scale on the table for you — verified against the primary legislation — and finally untangle, cleanly, the stubborn dispute over the AJD rate (1.2 % vs 1.5 %).*
A quick orientation on total purchase costs: For a resale property, budget for ~10–13 % of the purchase price; for a new build, ~12–13 % (i.e. 10 % IVA plus AJD, plus notary, Land Registry and lawyer). Further down we run the numbers on real figures.
Two possible tax paths — which one applies to you#
Whether you pay ITP or the IVA-plus-AJD combination comes down to a single question: are you buying second-hand, or directly from the developer?
- Resale (
segunda mano, the secondary market) → ITP applies
(Impuesto sobre Transmisiones Patrimoniales, the property transfer tax).
- Newly built, first sale → here you pay 10 % IVA (value-added tax) plus AJD
(Actos Jurídicos Documentados, stamp duty on documented legal acts).
Before any tax is calculated: the valor de referencia ✅#
Before any rate even comes into play, there's the question of which reference figure the tax is actually levied on — and that is not necessarily your purchase price.
✅ documented — With effect from 1.1.2022 (Ley 11/2021, BOE-A-2021-11473; amending Art. 10 TRLITPAJD & Art. 9 LISD), the valor de referencia (reference value) set by the Cadastre became the minimum taxable base for ITP, AJD and ISD. The mechanism behind it: what counts is always the higher of the two amounts — either your purchase price or that valor de referencia — regardless of what actually changed hands.
⚖️ Standing up to inflated values — STC 13/2026 ✅#
In its ruling STC 13/2026 of 12.02.2026, the Tribunal Constitucional ✅ confirmed the valor de referencia as constitutional. The crucial point, however, is the reasoning: it stands only because there is an open system with full freedom of evidence behind it. For you as a taxpayer, this means you can overturn the value with any form of evidence — first and foremost a informe pericial (expert appraisal report). Where the valor de referencia exceeds the true market price, the route to challenge it is open to you (rectificación de autoliquidación → TEAR/TEAC → the courts).
Practical note for buyers: - Pull thevalor de referenciabefore the notary appointment, via the Sede del Catastro. - Under no circumstances have the deed recorded below this value to save on tax — the consequence would be aliquidación complementaria(supplementary assessment), and on top of that a penalty.
ITP in the Balearics: tiered and progressive ✅#
✅ documented — The legal anchor is Decreto Legislativo 1/2014 de les Illes Balears, Art. 10 (BOE-A-2014-6925). The upper brackets at 12 %/13 % were added by Decreto-ley 4/2023 and subsequently carried forward through Ley 12/2023 (the 2024 budget act) — so they are in force for 2025/2026.
One persistent misconception to clear up at the outset: ITP is not applied as a single flat rate across the entire purchase price. Instead, the calculation runs in tiers, progressively — each band of value carries its own rate:
| Value band (tranche) | Rate |
|---|---|
| up to €400,000 | 8 % |
| €400,000.01 – €600,000 | 9 % |
| €600,000.01 – €1,000,000 | 10 % |
| €1,000,000.01 – €2,000,000 | 12 % |
| over €2,000,000 | 13 % |
✅ Look closely: The top rate of 13 % only kicks in from €2 million — the band between €1 million and €2 million stays at 12 %. This is where many secondary sources get the maths wrong.
Reductions do exist, but they come with conditions attached and are mostly available only to residents buying a primary home. Possibilities include around 4 % for a primary residence ≤ €270,151.20, 2 % for, among others, buyers under 36, large families and cases of disability, and in some instances even a 0 % rebate (bonificación) for young first-time buyers. As a foreign buyer acquiring a second home or a holiday property, you generally cannot claim these reliefs.
Deadline & form: It is declared via Modelo 600 to the ATIB (the Balearic tax agency), within 30 working days (días hábiles) of the deed being signed.
Buying new build: IVA plus AJD ✅#
On a first sale, two components take the place of ITP:
- IVA of 10 % on the purchase price (for residential property).
- AJD at the general rate of 1.5 % ✅ — governed by DLeg 1/2014 IB.
🔎 1.2 % or 1.5 %? The AJD contradiction, cleanly resolved#
✅ clarified (DLeg 1/2014 IB). Three different AJD rates are the source of the confusion:
- General 1.5 % — anchored in Art. 15 (set this way since 1.1.2020; previously it was 1.2 %).
- Reduced 1.2 % — exclusively for a first owner-occupied home ≤ €270,151.20, established in Art. 17.
- Increased 2 % — for properties ≥ €1,000,000, or in the case of
renuncia a la exención del IVA(waiver of the IVA exemption), governed by Art. 17 bis.
The 1.2 % figure doing the rounds is therefore the reduced rate — and precisely not the general one.
Tax burden on a new build, rounded: ~11.5 % (10 % IVA + 1.5 % AJD).
Three worked examples (resale, non-resident, no mortgage)#
At €500,000: ITP = 400,000 × 8 % + 100,000 × 9 % = €41,000. Add notary (~€1,300), Land Registry (~€750), gestoría (~€500), lawyer (~1 % + IVA ≈ €6,050) and, if needed, a translator (~€400) — together this comes to ≈ €50,000 (≈ 10 %).
At €1,000,000: ITP = 32,000 (8 %) + 18,000 (9 %) + 40,000 (10 %) = €90,000. Including the additional costs, you arrive at ≈ €107,000 (≈ 10.7 %).
*As a cross-check:* At €700,000, ITP = 32,000 + 18,000 + 10,000 = €60,000 ✅ (consistent).
Which Modelos await you#
| Modelo | Purpose | Deadline |
|---|---|---|
| 600 | ITP/AJD (ATIB) | 30 working days from deed |
| 210 | IRNR (non-residents, → Ch. 05/06) | annually / 4 months on sale |
| 211 | 3 % retención (withholding) on a sale by non-residents (→ Ch. 06) | 1 month from deed |
| 714 | Wealth tax (→ Ch. 07) | Renta campaign (Apr–Jun) |
| 720 | Overseas assets (residents only, → Ch. 18/19) | 1.1.–31.3. |
Going deeper#
Tax calendar at a glance#
| Deadline | Matter | Modelo |
|---|---|---|
| 30 working days from deed | ITP / AJD | 600 |
| 1 month from deed | 3 % retención (non-resident seller) | 211 |
| 1–20 January (rental) / following year (own use) | IRNR owner | 210 |
| 30 working days (sale) / 6 months (inheritance) | Plusvalía municipal | municipal |
ITP reductions in detail (DLeg 1/2014 IB)#
- Full waiver — €0 ITP (100 % rebate): for a first
vivienda habitual(primary residence), provided the buyer is under 30 or has a disability of ≥ 33 % (Art. 14 quater). Conditional on: residence in the Balearics over the preceding 3 years, a first property with at least 50 % full ownership, and a value ≤ €270,151.20. ✅ - 2 % on the first €270,151.20 for first-time buyers under 36. 🟡
- Familia numerosa / monoparental (large or single-parent family) ✅: 2 % on the first €270,151.20 (8 % above that), provided the property serves as a
vivienda habitualand the total value stays ≤ €350,000. 🔎 The 5 % figure circulating in secondary sources actually relates to VPO (publicly protected/subsidised housing), not the ordinary familia-numerosa relief. 🔴 Exactly which article applies (Art. 10 or 12 DLeg 1/2014) remains unresolved for now. - 🟡 As of 2026: The island-specific price thresholds for the reliefs rose (now €307,089 on Mallorca) — but the relief itself still applies only to the first €270,151.20.
Special situations under ITP/IVA#
- Garages & trasteros (storerooms): On a new build, the 10 % IVA applies to at most 2 parking spaces, and only where they are acquired in the same legal act as the dwelling — a 3rd space is taxed at 21 %. ✅
- VPO: The first transfer is exempt from AJD. ✅
extinción de condominio(dissolution of co-ownership): as a rule, only AJD is due, not ITP. 🟡renuncia a la exención del IVA(a sale to a business/trader): this gives rise to 2 % AJD plus aninversión del sujeto pasivo(reverse charge) — in this case the buyer owes the IVA. ✅
IRNR reform 2024 (important if you let your property)#
✅ For rental income from 1.1.2024, the quarterly filing is dropped; it is now settled only once a year (Modelo 210), with a deadline of 1–20 January of the following year (for the territorio común = the Balearics). The renta imputada (imputed income for own use) stays on an annual cycle (due by 31.12. of the following year). Where a property has several owners, each owner files their own Modelo 210.
❓ FAQ#
How high is the property transfer tax on Mallorca? On a resale, the progressive ITP applies — 8 % up to €400,000, then 9/10/12 %, and from €2 million finally 13 %. On a new build, by contrast, it's 10 % IVA + 1.5 % AJD.
What is the valor de referencia, and why does it matter? It is a value set by the Cadastre that, since 2022, serves as the minimum taxable base for purchase tax. The tax is levied on the higher of two figures — your purchase price or the valor de referencia. The latter can be challenged by means of an appraisal (STC 13/2026).
Sources (selection)#
- DLeg 1/2014 IB (BOE-A-2014-6925), Art. 10 (ITP), Art. 15/17/17bis (AJD) · DL 4/2023 · Ley 12/2023
- Ley 11/2021 (BOE-A-2021-11473) · STC 13/2026 (→ Ch. 23) · ATIB / Sede del Catastro