PROPERTY SALE IN MALLORCA – INCIDENTIAL TAXES
The sale of a property in Spain – especially in Mallorca – is clearly regulated in terms of taxation, but is often underestimated. Sellers are not subject to flat-rate sales taxes, but rather to several specific types of tax, the amount of which varies depending on the situation. Below you will find a complete and comprehensive overview of all relevant taxes and duties that a seller should take into account.
1. Capital gains tax (Impuesto sobre la Ganancia Patrimonial)
The most important tax when selling property is capital gains tax on the profit made.What is taxed?
The difference between:
• the original purchase price (including ancillary purchase costs)
• and the sale price (minus ancillary sale costs)
Tax rates for private individuals (as applicable in Spain)
• 19% on the first €6,000
• 21% on €6,001 – €50,000
• 23% on €50,001 – €200,000
• 27% on €200,001 – €300,000
• 28% on €300,000 and above
📌 Important:
Costs such as notary fees, land transfer tax on purchase, estate agent fees, modernisation or renovation costs can be offset against tax – a significant lever for reducing your tax burden.
Anything that is directly related to the purchase, ownership, value enhancement or sale of the property and can be substantiated may be taken into account:
Deductible purchase costs (from the original purchase)
These increase the taxable purchase price and thus reduce the profit:
✔️ Notary fees on purchase
✔️ Land registry fees (Registro de la Propiedad)
✔️ Gestoría fees on purchase
✔️ Solicitor’s fees on purchase
✔️ Valuation/appraisal fees (if necessary for purchase)
Deductible investments & value increases
Verifiable improvements that increase the value or extend the useful life are deductible:
✔️ Complete bathroom renovation
✔️ New kitchen
✔️ New electrical/water pipes
✔️ Windows, insulation, roof
✔️ Permanently installed heating/air conditioning
✔️ Pool construction
✔️ Floor plan changes
✔️ Energy-efficient renovations
2. 3% withholding tax for non-residents
If the seller is not resident in Spain for tax purposes, a special rule applies:
-The buyer automatically retains 3% of the sale price.
-This amount is paid directly to the Spanish tax office.
👉 This 3% is not an additional tax, but rather an advance payment on the capital gains tax that will be due later.
After the sale:
-The seller must submit a tax return (Modelo 210)
-If the tax is higher → additional payment
-If the tax is lower → refund possible
3. Plusvalía Municipal (municipal capital gains tax)
This tax is levied by the respective municipality (e.g. Palma, Calvià, Andratx).
What is taxed?
The increase in value of the land (not the building!) since the last transfer of ownership.
Special features:
-Amount depends on holding period and cadastral value.
-Payment is also due if no real profit has been made (with exceptions according to current case law).
-Payment is usually made within 30 days of sale.
📌 Since the reform, it has been possible to choose between:
-real increase in value
-flat-rate calculation
– the cheaper option counts
4. Estate agent fees
Estate agent fees are not a tax, but they are one of the most significant selling costs.
-Usual in Mallorca: approx. 5% plus VAT.
-Can be deducted in full from the capital gains tax.
-This directly reduces the capital gains tax.
5. Other possible costs for the seller
Depending on the situation, the following additional costs may apply:
-Energy certificate (CEE)
-Certificate of habitability (renewal)
-Nota Simple / Land registry documents
-Legal assistance
-Cancellation of existing mortgages
-Municipal taxes (IBI share until the date of sale)
6. Tax exemptions and special regulations
In certain cases, the seller can sell partially or completely tax-free:
✔ Main residence regulation
If the proceeds from the sale are reinvested in a new main residence in Spain.
✔ Sellers over 65 years of age
When selling their main residence, the profit is completely tax-exempt.
✔ Sale without profit
No capital gains tax, but possibly Plusvalía Municipal (check!)
Conclusion: Tax planning is crucial!
Selling property in Spain is transparent, but tax-intensive. Early planning, correct documentation of all costs and professional support from estate agents, tax advisors or solicitors can save tens of thousands of euros.
An individual tax assessment prior to sale is highly recommended, especially for high-priced properties in Mallorca.