Taxes, NIE & legal matters when buying property in Mallorca
Everything you need to know as a German-speaking buyer — clear, understandable and without jargon.
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The NIE number
The NIE (Número de Identidad de Extranjero) is the Spanish tax number for foreigners. It is mandatory for any property purchase, for opening a Spanish bank account and for paying Spanish taxes.
How to apply for the NIE:
At the Spanish consulate in Germany (Munich, Frankfurt, Hamburg, Berlin) — recommended
Directly in Mallorca at the immigration office (Oficina de Extranjeros) in Palma
Via a local lawyer with a power of attorney (simplest option)
Tip: Start the NIE process as early as possible — in parallel with the viewings. Processing takes 1–3 weeks depending on the authority.
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Property transfer tax (ITP)
The Impuesto de Transmisiones Patrimoniales (ITP) is the most important tax when buying a resale property in Spain. In the Balearic Islands it is calculated progressively:
Purchase price
ITP rate
Up to €400,000
8%
€400,001 – €600,000
9%
Over €600,000
10%
For new builds the following applies instead: 10% VAT (IVA) + 1.5% stamp duty (AJD). ITP does not apply.
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Ongoing taxes as an owner
IBI (property tax)
Annual municipal tax on real estate. Calculated on the basis of the cadastral value. Typical: €500–3,000 per year depending on location and size.
IRNR (non-resident tax)
Anyone whose main residence is not in Spain pays a notional rental income tax each year (approx. 1.1–2% of the cadastral value × 19% for EU citizens).
Wealth tax (Impuesto Patrimonio)
In the Balearic Islands from a net worth of €700,000 (general) or €3 million (solidarity tax). Progressive tax rate 0.28–3.45%.
Rental income (with ETV licence)
Rental income is taxed in Spain at 19% (EU citizens). Proportionate costs such as property management, repairs and depreciation are deductible.
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Germany–Spain double taxation agreement
Germany and Spain have a double taxation agreement (DTA). As a rule, income from property and capital gains on its sale are taxed in the country where the property is located — i.e. Spain. In Germany, however, the Spanish income must be reported under the progression clause.
Note: This information is of a general nature and does not constitute tax advice. We recommend consulting a German tax adviser with Spanish expertise as well as a local lawyer in Mallorca.
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