Who Pays What When Buying or Selling a Home in Mallorca?

When you're buying or selling a home, knowing exactly who pays for what can be confusing. Let's break it down simply so you'll know what to expect, whether you're the buyer or the seller.

Expenses for the Buyer

• Notary Costs:
  When you buy a property, one of the last steps is signing the property deed at a notary. Expect these fees to be around 0.2% to 0.5% of the property's purchase price.

• Property Registration:
  After signing at the notary, the property needs to be registered in your name at the local Property Registry. Costs here typically range from 0.1% to 0.25% of the property price. For example, for a €100,000 property, expect around €250.

• Taxes:

• New Builds:
  You pay VAT (IVA) at 10% plus Stamp Duty (IAJD) between 0.5% to 1.5%, depending on your region.

• Second-hand Properties:
  You pay Property Transfer Tax (ITP), usually between 6% to 10% of the purchase price.

• Estate Agency Fees:
  Real estate agent fees vary and are usually split between buyer and seller. It's good practice to clarify these upfront with your agent.

Expenses for the Seller

• Notary Fees:
  As a seller, you’ll pay for the notary fees related to the deed of sale, typically around €400 to €800.

• Additional Requirements:

• Energy Efficiency Certificate (about €200)
• Utility Payment Certificate (confirming bills are paid)

• Certificate of Habitability (around €100)

• Mortgage Cancellation:
  If you’re selling a home that had a mortgage, you'll need to:

• Obtain a certificate from your bank confirming no outstanding debt (free)
• Go to a notary to sign a mortgage cancellation deed (around €200)

• Register the mortgage cancellation (costs start at around €100, depending on mortgage size)

• Taxes for Sellers:

• Municipal Plusvalía:
  This local tax depends on how long you've owned the property and its cadastral value increase. Expect to pay 20% to 30% of the increase in land value.

• Capital Gains Tax (IRPF):
  Any profit you make from the sale needs to be declared on your annual tax return.

• Property Tax (IBI):
  You pay for the full year if you were the owner on January 1st of that year.

• Estate Agency Fees:
  Typically between 3% and 7% of the sale price, depending on your agreement.

Quick Tips

• Always clarify agency fees beforehand.
• Double-check regional taxes as they can vary across different parts of Spain (e.g., Mallorca has different rates compared to Barcelona).
• Consider consulting with real estate professionals or legal advisors to ensure everything is managed correctly and efficiently.

Understanding these expenses ahead of time can save you from surprises and streamline your buying or selling process.