In short: when you buy a new-build home in Mallorca, taxes add 11.5% to the price: 10% VAT plus, generally, 1.5% stamp duty (AJD) in the Balearic Islands. On top of that come notary and registry fees, charged under official tariffs, and any lawyer or gestoría fees. These costs are paid from your own funds, not the mortgage.
The purchase price is only part of the total cost of buying a property. Around that price come taxes and expenses that you should add to your budget from the start. Knowing them in advance is essential for planning your budget realistically and avoiding unpleasant surprises in the weeks before signing.
This article breaks down all the costs associated with buying a new-build property in Mallorca. From mandatory taxes to professional fees, including expenses many buyers do not think about until the moment comes to pay them.
How much VAT do you pay on a new-build home?
Buying a new-build property in Spain is subject to Value Added Tax at 10% of the sale price. This is the most significant fiscal cost of the entire transaction and applies exclusively to the first transfer of the property — that is, when you buy directly from the developer.
For a property priced at €300,000, VAT amounts to an additional €30,000. For one at €500,000, it is €50,000. This is an amount that must be factored into your financial planning from the very beginning, because it is paid with every payment to the developer: the reservation, any stage payments if you buy off-plan, and the rest at the deed.
It is worth clarifying that VAT only applies to new-build property. If you buy a resale property, the applicable tax is the Transfer Tax, with rates that vary by autonomous community. In the Balearic Islands, this tax ranges from 8% to 13% depending on the property’s value, according to the Balearic consolidated tax law (BOE, in Spanish). This fiscal difference is one more factor to consider when comparing new-build and resale property.
What is stamp duty (AJD) and how much is it in the Balearics?
Alongside VAT, new-build purchases are subject to Stamp Duty (Actos Jurídicos Documentados), which taxes the formalisation of the notarial document. In the Balearic Islands, the general rate is 1.5% of the deeded price; there are reduced rates for certain main-residence cases (for example, buyers under 36) and a 2% rate from €1,000,000, under the same consolidated law. Check with your gestor whether you qualify for a reduced rate.
For a €300,000 property, this tax amounts to €4,500. It is settled after the public deed is signed and your administrator or lawyer will handle the filing with the Balearic tax agency within the legal deadline after signing.
If you finance the purchase with a mortgage, the Stamp Duty on the mortgage deed is borne by the lending institution since the 2018 legislative reform. This change represented a significant saving for buyers who previously had to assume this cost as well.
How much does the notary cost?
Notary fees are regulated by a fixed tariff and are non-negotiable. They depend on the property price and the number of pages in the deed.
The notary charges for the purchase deed. If you also take out a mortgage, the fees for that second deed are borne by the lender. The notary will provide a detailed invoice with the breakdown of fees in accordance with the official tariff.
It is advisable to request an advance estimate from the notary before signing so you know the exact amount you will need to pay. This avoids surprises and lets you have the funds ready in advance.
How much does Land Registry registration cost?
Registering the deed at the Land Registry also carries a cost regulated by an official tariff that depends on the property’s value. This expense is essential because registration is what grants full legal protection of your property right against third parties.
The registration period varies depending on the Registry’s workload. Your lawyer or administrator will handle submitting the deed and collecting the registered copy once the process is complete.
Example: taxes on a €350,000 new-build home
| Item | How it is calculated | Amount |
|---|---|---|
| VAT | 10% of the price | €35,000 |
| AJD (general Balearic rate) | 1.5% of the deeded price | €5,250 |
| Total taxes | 11.5% | €40,250 |
| Notary and registry | Official tariff based on the price | Ask for an advance estimate |
| Lawyer, gestoría, valuation | Each professional’s quote | Ask for a fixed quote |
Key figure for your budget: in taxes alone, a €350,000 new-build home in Mallorca means an extra €40,250 at the general AJD rate. Add notary, registry and professional fees on top, and have the whole amount available from your own funds before signing.
How much do the lawyer and gestoría charge?
Your property lawyer’s fees are not regulated: some charge a percentage of the purchase price and others a fixed fee. Always ask for a written, fixed quote. This cost covers contract review, registry and planning checks, full document management and support throughout the process up to Land Registry registration.
If you need tax advice — particularly relevant for non-resident buyers — the tax adviser’s fees are an additional expense that varies according to the complexity of your situation. If you are buying as a non-resident, see our tax guide for non-resident buyers.
The administrator (gestoría) handling tax payments and document filing at the Registry also charges for their services. In many cases your lawyer includes these services in their fees or coordinates with a trusted administrator.
What costs come with a mortgage?
If you finance the purchase with a mortgage, there are specific costs associated with the loan. The property valuation is paid by the buyer. Notary, registry and gestoría costs for the mortgage deed are borne by the lender under Law 5/2019 on real estate credit agreements (in Spanish).
The arrangement fee, if applicable, is negotiated directly with the bank. Many institutions have eliminated it or reduced it significantly as a commercial incentive. Insurance linked to the mortgage, such as the mandatory home insurance and the life insurance many banks require, are recurring costs to include in your long-term financial planning.
For non-resident buyers, some institutions apply different conditions that may include higher fees or greater equity requirements. Comparing offers from several lenders is essential to secure the best terms.
What costs come after the purchase?
After the deed, there are additional costs worth keeping in mind. Utility connections for water, electricity and gas carry costs that vary by provider and contracted capacity. Internet and phone set-up is a smaller but necessary cost from day one.
The owners’ community entails a monthly fee covering maintenance of communal areas, pool, gardens, building insurance and, where applicable, concierge services. The amount depends on each development’s services: ask for the expected fee before signing.
The annual property tax (IBI) is a municipal levy on property ownership. Its amount depends on the property’s cadastral value and the rate set by each town hall, so check it with the municipality where you buy.
If you are looking for a new-build home in the area, see our new-build developments in eastern Mallorca, and if you are buying from outside Spain, start with our guide to buying a home in Spain as a foreigner.
Frequently asked questions about new-build purchase costs
How much extra money do I need on top of the property price?
In taxes alone, 11.5% of the price at the general Balearic AJD rate (10% VAT and 1.5% AJD). For a €350,000 home that is €40,250. Then add notary, registry, valuation if you take a mortgage, and any professional fees.
Can I include purchase costs in the mortgage?
Usually not. Banks lend a percentage of the property’s appraised value, not the price plus costs, so purchase taxes and expenses are normally paid from your own funds.
Are there any costs I can negotiate or reduce?
Taxes and notary and registry tariffs are regulated and non-negotiable. Lawyer and tax adviser fees can be negotiated. The mortgage arrangement fee is also negotiable. Always compare several options before committing to a professional or a lender.
Are costs different for non-resident buyers?
Purchase taxes and tariffs are the same. What changes are the taxes you pay afterwards as a non-resident owner and, often, the mortgage conditions. See our tax guide for non-residents.
When is each cost paid?
VAT is paid with every payment to the developer, including the reservation and stage payments if you buy off-plan; the notary at the deed; AJD and the registry right after signing. To see how the reservation works, read how to reserve your property: contract, deposit and timelines.
Information updated October 2026.