Resale homes: transfer tax
An ordinary resale purchase usually falls under ITP, the regional transfer tax. The Balearic general scale is progressive: each slice is charged at its own rate, rather than the highest rate applying to the whole property.
| Slice of property value | General rate |
|---|---|
| Up to €400,000 | 8% |
| €400,000 to €600,000 | 9% |
| €600,000 to €1,000,000 | 10% |
| €1,000,000 to €2,000,000 | 12% |
| Above €2,000,000 | 13% |
The taxable value needs checking
Do not assume the agreed price is the tax base. The cadastral reference value can determine the taxable amount; a higher declared value or price may take precedence. Ask your adviser to confirm the applicable base and any available challenge procedure.
Special transactions, partial interests and reliefs need their own calculation. Eligibility for a reduced rate must be checked against the rules and personal circumstances at the transaction date.
New homes: VAT and stamp duty
A qualifying first delivery of a home by a developer generally attracts 10% VAT, rather than resale ITP. The transaction may also attract AJD stamp duty. The Balearic general AJD rate is 1.5%, with a special 2% rate for qualifying property deeds at or above €1 million. Other exceptions exist.
A recently renovated house is not automatically a first delivery for VAT purposes. Ask the seller and your adviser to establish the correct treatment before setting your budget.
Worked example: an €800,000 resale
Assume a purchase of the whole property for €800,000, with a confirmed taxable value of €800,000, the general Balearic ITP scale and no relief. This is an illustration of the calculation, not a quotation or a typical market price.
| Part of the taxable value | Tax |
|---|---|
| First €400,000 × 8% | €32,000 |
| Next €200,000 × 9% | €18,000 |
| Remaining €200,000 × 10% | €20,000 |
| Illustrative ITP total | €70,000 |
Price plus ITP is therefore €870,000, before notary, registration, professional fees, finance and any work to the home. A deposit already credited towards the price must not be added a second time. If a lender is involved, distinguish the total acquisition cost from the cash you personally need at each payment date.
What if the tax value exceeds the price?
The cadastral reference value is not the same as the cadastral value used for IBI. Where a reference value exists, a higher declared value or agreed price can take precedence. Ask your adviser to establish the correct value for the acquisition date before treating an offer price as the tax base.
If the price is €800,000 but the confirmed taxable value is €900,000, the same simplified general-scale calculation gives €80,000 ITP. That is €10,000 more than in the first example. Any challenge to a reference value needs its own advice and evidence; do not simply omit the difference from the filing.
Build a cost sheet you can actually use
ATIB states a general filing/payment period of one month from the taxable act or contract. Ask the person handling the transaction to confirm the actual trigger date and deadline, including any private agreement signed before the deed. Keep the return and payment receipt with the purchase records.
- Purchase price and payments already made: record the remaining balance, recipient and due date.
- Acquisition taxes: identify ITP or VAT/AJD, the confirmed base, applicable reliefs and who files each return.
- Notary, registry, legal and technical work: obtain separate written estimates and check whether VAT and disbursements are included.
- Mortgage or foreign-currency costs: use the lender’s and payment provider’s actual terms rather than a blanket percentage.
- After purchase: list insurance, community fees, utilities, local taxes, pool/garden care and planned repairs in a separate annual budget.
Sources & further reading
This guide provides general information, not individual legal or tax advice. Confirm the rules that apply to your property and circumstances with an independent qualified adviser before committing.
