3.2.3. Taxes for Buying a Resale

At the time of purchase you will be required to pay the following taxes:

Transfer Tax  ITP - (Impuesto sobre Transmisiones Patrimoniales) 8% of Purchase Price 

This tax is charged on residential property in Mallorca being sold for the second time and all sales thereafter, as in re sales,  and is paid by the buyer.

It is charged by the Autonomous community at around 7% and increments progressively with the value of the property. Although national average is around 7% of the price paid for the property, each region can chose to apply a general rate or a higher rate. 

If any part of a deposit is paid before the sale is completed it is not subject to ITP pro rata. Nevertheless, the full amount of ITP must be paid upon completion of the sale.

There is no VAT to be paid and Stamp Duty is included within the ITP Transfer Tax.

Income Tax - IRNR (Impuesto sobre la Renta de No residentes)

(When buying from non-resident sellers) Form 211 – 3% of Purchase Price 

This is a personal income tax to be paid when the seller is a non-resident of Spain. The buyer witholds 3% of purchase price to pay tax authorities. If not paid the property is considered the asset backing the capital gains tax liability of the seller.