Spain is one of the most popular countries for US expats, thanks to its year-round sunshine, laid-back way of life, and thriving cities. Buying a property in Spain lets you experience everything the country offers – but it’s essential to factor in the costs.
In this guide, we’ll focus on the costs of purchasing a property in Mallorca – an incredibly popular destination.
Read on to discover how much you can expect to pay, including the taxes and additional fees.
TL;DR – What is the Overall Cost of Buying a Property in Spain?
The costs of buying property in Spain are usually 10–15% extra on top of the purchase price. This covers:
- Taxes: ITP (resale homes, 8–13%) or VAT + Stamp Duty (new builds, 11.5%).
- Legal & Notary Fees: €1,000–€3,000.
- Land Registry: €300–€1,200.
- Agent Fees: 3–5% of the purchase price.
- Valuation & Mortgage Costs: up to 1% of the loan + €500 for valuation.
After purchase, expect ongoing costs like annual property tax (IBI from €300+), community fees (€100–€315/month), insurance (€150–€500/year), and utilities.
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What Influences the Cost of Buying a Home in Mallorca?
| Cost | Summary | Typical Amounts |
|---|---|---|
| Purchase Price | Price of the property | €3,000–€10,000+ per m² (Mallorca ranges) |
| Real Estate Agent Fees | Commission for finding and negotiating | 3–5% of purchase price |
| Lawyer / Legal Fees | Due diligence and contract review | ~0.5–1.0% of price (often €1,000–€3,000+) |
| Property Transfer Tax (ITP) | Tax on resale homes (progressive) | 8–13% of purchase price |
| VAT (IVA) + Stamp Duty | For new‑build homes (instead of ITP) | 10% VAT + 1.5% Stamp Duty |
| Notary Fees | Official signing and deed | €400–€1,500 |
| Land Registry Fees | Registers you as the owner | €300–€1,200 |
| Valuation (Appraisal) | Bank valuation for a mortgage | Up to €500 |
| Mortgage Arrangement | Bank setup fee for the loan | Up to 1% of the loan amount |
| Note: Amounts vary by region and property. Figures shown use Mallorca as a guide. | ||
Mallorca offers something for everyone, including cosmopolitan nightlife, sandy beaches, luxury shopping, and beautiful homes. However, its popularity also means buying a home in Mallorca exposes you to an ultra-competitive marketplace.
Here are the main costs you’ll need to factor in when purchasing a home in Mallorca.
1: Purchase Price
The first thing you’ll need to consider is the price of your home. Mallorca has a vast range of neighborhoods, ranging from up-and-coming areas to high-end locations. For example, homes in Southwest Mallorca cost more money due to the area’s affluence and beauty.
However, neighborhoods like Inca are more affordable but may lack the charm of Mallorca’s more exclusive areas.
Average prices range from €3,000 to over €10,000 per square meter, depending on the property’s location.
2: Real Estate Agent Fees
Navigating the market can be challenging if you’re purchasing a property in Mallorca for the first time. Real estate agents can help you find a suitable property, arrange viewings for you, and offer advice on how much you should pay.
In many cases, your real estate agent will charge commission, usually between 3% and 5% of the purchase price.
3: Property Transfer Tax
If the home is a resale property, you’ll have to pay Property Transfer Tax (also known as ITP). As a progressive tax, the amount you pay depends on the purchase price, so it’s essential to factor in these costs before you make an offer.
The average rates are as follows:
- First €400,000 – 8%
- €400,001 to €600,000 – 9%
- €6000,001 to €1,000,000 – 10%
- €1,000,001 to €2,000,000 – 11%
- Over €2,000,000 – 13%
So, if you purchase a property for €1,500,000, the ITP would be around €145,000.
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4: New Build VAT
New build properties have different tax rules, and you’ll pay VAT instead of ITP. Also known as IVA, the tax on new build properties in Spain is 10%. However, it’s essential to also factor in Stamp Duty, which is usually 1.5% in Mallorca.
So, if your home costs €800,000, the IVA will be €80,000, and Stamp Duty is €12,000 – bringing your total costs to €92,000.
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5: Notary Costs
When you purchase a property in the USA, a solicitor will handle most of the process.
However, Spain has different laws, and you’ll need to find a notary to verify your documents, draft a public deed of sale, and verify that the purchase aligns with Spain’s legal guidelines.
As the government regulates notary rates, you can expect to pay between €400 and €1,500 – depending on the purchase price and whether the transaction is simple or has some complexities.
6: Land Registry
All property purchases in Mallorca must be registered, as it proves that you officially own the property. Once you’ve signed the public deed, you’ll need to sign the Land Registry and pay a fee.
In the Balearic Islands, the fees usually start at €300 and can cost up to €1,200. The amount you pay depends on the location and value, with more expensive properties in affluent neighborhoods having higher rates.
7: Valuation and Survey Fees
Most mortgage companies and banks ask for a valuation before accepting your application, as they want to make sure that the property is worth its purchase price. Luckily, valuations in Mallorca are affordable and rarely exceed €500.
Surveys aren’t legal requirements, but arranging one is a good idea, as it assesses the property’s structural condition and highlights any potential issues. The amount your survey costs depends on the company you use.
8: Mortgage Arrangement Charges
If you plan on getting a mortgage to fund your property, the bank or mortgage company may charge arrangement fees.
These charges are for setting up the mortgage and any paperwork involved, with most companies charging up to 1% of the loan amount.
However, in some cases, you might find a company that waives its fees, but this depends on the mortgage product you choose.
Ongoing Costs After Buying A Property in Mallorca
| Cost | Summary | Typical Amounts |
|---|---|---|
| IBI (Annual Property Tax) | Yearly local property tax | €300–€800+ per year |
| Community Fees | Shared services (security, pools, lifts) | €100–€315 per month (more in luxury areas) |
| Home Insurance | Cover for damage and theft | €150–€500 per year |
| Trash Collection | Local waste tax (sometimes in community fees) | ~€20–€40 per tonne (varies by council) |
| Rental & Management | For letting or holiday rentals | 10–20% of rental income (license rules apply) |
| Note: Amounts are typical for Mallorca and may change by area, building, and services. | ||
So, now that we’ve covered the initial costs of purchasing a home in Mallorca, it’s time to explore ongoing expenses. From community fees to home insurance and annual taxes, understanding these charges can help you budget for them.
Home Insurance
Home insurance protects your home against damage and theft, ensuring you receive financial support should anything go wrong.
While it’s not essential, many mortgage companies will ask you to obtain insurance before giving you the loan, as it preserves the property’s value.
Your policy costs will depend on the value and location of your property, with most homeowners paying around €150 to €500 annually.
IBI (Annual Property Tax)
Annual Property Tax (IBI) is an annual charge that applies to all property owners – regardless of whether you have a house, office, or even a parking space.
Your local council sets the rates, and Mallorca IBI charges typically start at €320 a year, but they can exceed €800.
Your property’s location can determine how much tax you’ll pay, with premium neighborhoods often commanding higher rates.
It’s advisable to ask the real estate agent about the property’s previous tax amounts.
Community Charges
Houses and apartments in gated communities often come with monthly fees covering services like maintenance, security, and repairs. Luxury communities may also charge for concierge services.
Again, there’s no set amount as it depends on the community, but the rates in Mallorca generally fall between €100 and €315 monthly.
If your community has additional amenities like swimming pools, gyms, and saunas, the costs may be higher.
Trash Collection
Mallorca homeowners also have to pay taxes for trash collection. These charges are non-negotiable, and failing to pay them can result in fines.
Your local authority will set these rates, depending on the amount of waste you generate and whether the waste goes to landfill or is incinerated. The landfill costs are up to €40 per tonne, while incineration costs are up to €20 per tonne.
The local authority has the right to increase this tax each year, but gated communities may include trash collection in their fees.
Rental and Management Fees
If you’re buying a home in Mallorca and are planning to either rent it or offer it as a holiday home, it’s essential to factor in property management fees.
Foreign buyers can expect to pay between 10% and 20% of the rental income, but the management service covers everything from screening potential tenants to performing maintenance.
Renting your home to tourists requires a holiday rental license fee. Please note that licenses are suspended until 2026, but you can still access short-term permits under the new laws.
Find Your New Home in Mallorca Today
At Vista Collection, we do more than show you houses; we guide you through every step of the process. From legal checks to negotiations, one trusted contact will handle everything with full transparency.
Whether you’re looking for a luxury villa, a modern apartment, or a new investment property, we simplify the process, ensuring it is safe and stress-free.
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FAQs
How can I avoid being overcharged when buying a property in Spain?
You can avoid extra costs by working with a trusted agency. At Vista Collection, we are fully transparent – no hidden commissions, no inflated fees. You’ll always know exactly what you are paying and why.
Do I need to hire separate lawyers, banks, and notaries myself?
No. With Vista Collection, everything is handled for you. We connect you with vetted lawyers, banks, and notaries who work in your best interest. You only deal with one point of contact – us.
How much time will I need to spend on the process?
Very little. Most of our clients are busy professionals with little free time. We handle the searching, viewing, negotiating, and paperwork. You stay updated, but don’t have to chase documents or deal with bureaucracy.
Can a US citizen buy a property in Spain?
Yes, US citizens can purchase a property in Mallorca, but they’ll need an NIE Number, secure financing, and support from a notary. Many legal professionals specialize in supporting US citizens through the process, ensuring a smooth transaction.
Is it expensive to buy a home in Mallorca?
It depends on where you choose to purchase a property. Mallorca has a range of neighborhoods, but some are more exclusive than others. However, it’s an incredibly diverse location, so you’ll have no problems finding an area that suits your budget.
Can Americans get mortgages in Spain?
Yes, depending on your financial circumstances and whether the bank thinks you can afford the mortgage.
In many ways, getting a mortgage in Spain is similar to getting one in the US. You go through an application process, and the amount you can borrow depends on the lender’s assessment.
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