Buying a property in Spain as a non-resident is a decision thousands of European families make every year. Eastern Mallorca, with its combination of tranquillity, nature and high building standards, has become one of the most attractive destinations for those seeking a second home or a long-term investment. However, before taking the plunge, it’s worth understanding the tax framework surrounding the transaction.
Taxes on new-build purchases for non-residents
When you buy a new-build property in Spain, the main taxes are VAT (IVA) and AJD (Stamp Duty). The standard VAT rate for new residential properties is 10% of the purchase price. On top of this comes the AJD, which in the Balearic Islands stands at 1.5% of the declared value.
It’s important to note that non-resident buyers pay exactly the same purchase taxes as residents. There is no additional surcharge for being a foreign national — something that often causes confusion. The difference appears afterwards, in the annual property taxation.
How much tax do you pay when buying a new-build home in Mallorca?
For a €300,000 new-build property in eastern Mallorca, the approximate breakdown would be: €30,000 in VAT (10%) and roughly €4,500 in AJD (1.5%). In total, around €34,500 in direct taxes, plus notary, land registry and administrative fees.
Key fact: According to the Spanish Tax Agency, EU citizens are taxed at 19% on imputed income from property in Spain, while non-EU nationals pay 24%. This is a significant difference worth considering well in advance.
Non-Resident Income Tax (IRNR)
Once you own the property, as a non-resident you must file Form 210 with the Spanish Tax Agency every year. This tax applies to the imputed income from your property, even if you don’t rent it out. If the home sits empty, tax is levied on 1.1% of the revised cadastral value (or 2% if it hasn’t been revised in the past ten years).
If you decide to let the property, you’ll be taxed on the net rental income. EU residents can deduct property-related expenses, whereas non-EU owners are taxed on gross income. This difference makes having a good tax adviser essential from day one.
Other costs associated with the purchase
Beyond taxes, buying a new-build involves additional costs that should be budgeted for from the outset. Notary fees typically range between €600 and €1,200, depending on the property price. Land Registry costs are similar, and administrative management fees can add between €300 and €600 for the full process. For a complete breakdown of every cost involved, see our guide to costs associated with buying a new-build property.
If you finance the purchase with a mortgage, since 2018 the bank covers the AJD on the mortgage deed, although the buyer still pays the AJD on the purchase deed. For non-residents, obtaining finance in Spain is possible, though conditions usually require a larger deposit — typically 30-40% of the property value.
Tips for non-residents buying in eastern Mallorca
The buying process as a non-resident doesn’t have to be complicated if you have the right support. The first step is obtaining your NIE (Numero de Identificacion de Extranjero), which is essential for any property transaction in Spain. For a complete overview, we recommend our guide to essential documentation for buying property in Spain as a foreigner.
It’s also advisable to open a Spanish bank account for direct debits and tax payments, and to work with a specialist tax adviser experienced in non-resident taxation. Every situation is different, and a good professional will help you optimise your tax position within the current legal framework.
Once you understand the tax framework, the next step is learning how the reservation and arras contract works.
Frequently asked questions about taxes for non-residents buying in Spain
Do foreigners pay more tax when buying a property in Spain?
No — purchase taxes are exactly the same for residents and non-residents. For new-build homes you pay 10% VAT plus the AJD applicable in each autonomous community. The tax difference appears after the purchase, through the annual IRNR. Important: always consult a tax adviser for your particular circumstances.
What is Form 210 and when do I need to file it?
Form 210 is the Non-Resident Income Tax return. It must be filed annually with the Spanish Tax Agency, generally before 31 December of the year following the tax period. It taxes either the imputed income from the property or rental income if you let it out.
Do I need a NIE to buy a property in Mallorca?
Yes, a NIE is compulsory for any property transaction in Spain. It is a tax identification number for foreign nationals, applied for at the Spanish consulate in your country or directly in Spain. The process is straightforward and usually takes a few weeks.
Can I deduct expenses if I rent out my property in Mallorca as a non-resident?
Residents of the European Union and European Economic Area can deduct expenses directly related to the rental, such as maintenance, insurance or community fees. Non-EU nationals are taxed on gross income with no deductions. Important: check with your tax adviser to confirm which expenses are deductible in your specific situation.
How much does it cost in total to buy a new-build home in eastern Mallorca?
On top of the property price, you should budget for an additional 11.5% to 13% in taxes and fees. For a €300,000 property, that means roughly €34,500 to €39,000 covering VAT, AJD, notary, registry and administrative costs. New-build prices in eastern Mallorca range from €250,000 to €600,000 depending on location and type. Always request up-to-date information for the development you’re interested in.