Buying property in Mallorca and the Balearic Islands with a Spanish mortgage

The short answer

The Balearic Islands had the highest share of foreign buyers of any Spanish region in the second quarter of 2026: 32.27% of registered home purchases, according to the Land Registrars’ statistics. Prices are among the highest in the country, and transfer tax on a resale home rises in bands from 8% to 13%.

For a non-resident, the deposit decides the budget. Spanish lenders typically finance 60–70% of the lower of price and valuation, and on the larger loans that are common in Mallorca and Ibiza some are more conservative. On an €800,000 resale home with 60% financing, plan on about €402,000 in cash.

What does property cost in the Balearic Islands?

The Land Registrars put the average registered price at €4,311/m² in the second quarter of 2026, second only to Madrid among Spanish regions. The Ministry of Housing publishes the average appraised value, the figure valuers assign for mortgage purposes, for municipalities above 25,000 inhabitants. A selection:

Averages hide wide ranges. A village house inland and a sea-view villa in the south-west can sit far apart, and smaller municipalities are not published. Our areas guide compares prices and taxes on the mainland coasts we cover.

How is Balearic transfer tax calculated in 2026?

A resale home pays transfer tax (ITP) to the Balearic Tax Agency (ATIB). The general scale has applied since 1 January 2023 and was left unchanged by the latest amendment of the Balearic tax code, Law 4/2026 of 11 June. Each rate applies to its own slice of the value:

Three details matter in practice:

• The ATIB converts the result into an average rate rounded to two decimals, so your figure can differ from a straight band calculation by a few euros.
• Under state rules, the tax base can be the property’s cadastral reference value if it is higher than the price.
• You have one month from signing to file and pay.

Reduced rates of 4% and 2%, and a 100% relief for some buyers under 30, do exist. All of them require the property to become the buyer’s main home, with a value cap that starts at €270,151.20, and the relief also requires three years’ residence in the islands. A holiday home bought by a non-resident pays the general scale.

New build: VAT and stamp duty

A new home bought from a developer pays 10% VAT instead of transfer tax, plus Balearic stamp duty (AJD) on the deed: 1.5% in general and 2% when the property is worth €1,000,000 or more. The 2% applies to the whole value, not only to the part above €1,000,000.

How much purchase tax on €400,000, €800,000 and €1,500,000?

The €800,000 figure is €32,000 on the first €400,000, €18,000 on the next €200,000 and €20,000 on the last €200,000. A flat 8% would understate it by €6,000.

Worked example: €800,000 resale, non-resident buyer

Plan the 60% column until a lender has assessed your case and the valuation is known. Under Law 5/2019, the lender pays the notary, registry and processing costs of the mortgage deed; you pay the valuation. Test the monthly payment with our Spanish mortgage calculator, and size the cash with the purchase costs calculator, checking the tax line against the Balearic table above.

Large loans: valuation, LTV and affordability

Balearic mortgages are among the largest in Spain. The average new home loan registered in the second quarter of 2026 was €277,850, second only to Madrid, with an average term of 24.25 years, one of the shortest in the country.

The lender finances a percentage of the lower of price and valuation. Mortgage valuations follow Order ECO/805/2003, which leans heavily on comparable properties. A rural finca, a frontline villa or a restored townhouse may have few true comparables, so the valuation can come in below the agreed price, and the gap is paid in cash. On larger amounts, some lenders also apply a lower financing percentage or ask for more evidence of income and wealth than on an ordinary loan.

As a working reference, the new payment plus what you already pay at home should stay within about 30–35% of net income. Expected holiday-rental income rarely counts in full; our guide to second-home mortgages in Spain explains why lenders are more cautious with a holiday home.

Can you let the property to tourists?

Tourist letting is governed by the Balearic Tourism Law (Law 8/2012), and the principle is restrictive. To let a home to tourists, the owner files a responsible declaration of activity, the home must be in a zone classified as suitable, and tourist places must be acquired where the island requires them.

For flats, the door is closed to newcomers. Decree-Law 4/2025, in force since 16 April 2025, bars new tourist-letting declarations anywhere in the Balearic Islands for homes in buildings under horizontal property, except terraced and semi-detached houses. Flats already registered keep five-year registrations that can be renewed only while every requirement is still met.

Two practical rules follow. Do not pay extra for a “licence” until your lawyer has checked it in the island’s tourism register and confirmed what happens to it when the property changes hands. And do not build the mortgage on rental income.

Mallorca, Ibiza or Menorca: what changes in practice?

• Tax does not change. Transfer tax, VAT and stamp duty follow the same Balearic rules on every island.
• Tourist planning does. Under the Tourism Law, the island councils of Mallorca, Menorca, Ibiza and Formentera each plan tourism on their own island, so zoning for letting differs by island and municipality.
• Prices diverge. In the ministry’s figures, Ibiza’s two largest municipalities lead, Menorca’s two main towns are more than €1,000/m² apart, and Mallorca runs from Calvià to Inca.
• The mortgage process is the same. Lenders assess you, the property and its valuation in the same way on every island.

Do British buyers need a military permit?

Possibly. Under Spain’s defence-zone rules, Law 8/1975 and Royal Decree 689/1978, every Spanish island is a zone where property purchases by foreigners require a military authorisation, and notaries and land registries must see it before signing or registering the deed. EU nationals are exempt, and existing urban areas generally fall outside the rule.

Since Brexit, British buyers are no longer EU nationals, and the same applies to American buyers. If the property is a rural home or a plot outside a town, ask your lawyer to check the requirement as soon as the price is agreed, and build the time it takes into the deposit-contract deadline.

Buying from abroad: remote file, notary on the island

RCG Finance has no office in the Balearic Islands. We work remotely: documents are exchanged online, meetings happen by video call, and the deed is signed before a notary on the island, by you in person or by your representative under a power of attorney.

Allow six to ten weeks from a complete file to the notary. Law 5/2019 gives you at least ten calendar days with the binding offer before signing, plus a free meeting with the notary to explain the terms. If the seller is a non-resident without a permanent establishment in Spain, you must withhold 3% of the price and pay it to the Spanish Tax Agency, under article 25.2 of the Non-Resident Income Tax Act. After completion, you file Spanish tax as a non-resident owner every year; our guide to non-resident taxes after buying explains how.

How RCG coordinates it

RCG Finance is a real-estate credit intermediary registered with the Bank of Spain under number E760, based in Salou. We prepare your file once and present it to the lenders that finance non-residents, coordinate the timetable with your lawyer and the transfer of your funds, and we only charge if we get your mortgage. We do not give legal or tax advice.

Checklist before buying in the Balearic Islands

• I have modelled 60–70% financing, and a lower figure if the loan is large.
• I have calculated transfer tax in bands, not as a flat percentage.
• For a new build worth €1,000,000 or more, I have used 2% stamp duty.
• I am not relying on tourist-rental income, and any registration has been checked.
• If I am not an EU national and the property is outside a town, my lawyer has checked the military authorisation.
• My deposit contract covers a refusal or a reduced offer after a low valuation.
• I have planned the notary signing: in person on the island or through a power of attorney.

What to do next

Size the cash with the purchase costs calculator, gather your documents with the non-resident mortgage checklist, and compare the mainland coasts in our areas guide. When the numbers work, our non-resident mortgage service puts the file in front of the right lenders.