Buying budget in Mallorca

How much property can you really afford on Mallorca? It's not your equity alone that decides, but what remains of it after the down payment, taxes and fees. The calculator turns the usual calculation on its head: from your equity and your bank's loan-to-value ratio, it tells you the maximum purchase price you can manage.

How much property can I afford on Mallorca?

Your budget is not your equity divided by the share you have to cover yourself. Because the bank only finances part of the purchase price, and it doesn't finance the purchase incidentals at all: you pay taxes, notary, land registry and advisory fees additionally out of your own pocket. The maximum purchase price is therefore the amount at which your equity is exactly enough to cover the unfinanced part of the price and the full incidental costs.

How the calculation works

The calculator turns the usual way of thinking on its head. Normally you ask: I'm buying at a certain price, what will that cost me in total? Here you ask: I have a certain sum, which purchase price fits that, without money being short at the notary appointment?

Behind this lies a simple condition. Your equity must pay for two things simultaneously:

• the part of the purchase price that the bank does not finance,
• all purchase incidental costs, meaning taxes, notary and land registry fees, the fee for the gestoría — a Spanish administrative office that handles the official procedures and tax registration for you — and the advisory fee.

Both items grow with the purchase price. That's why the budget can't be determined by a single division: the incidental costs aren't a fixed surcharge, but consist of percentages of the price and amounts that follow an official fee schedule. The calculator therefore searches for the purchase price at which both sides of the equation balance exactly, and then shows you how the sum breaks down.

What the bank finances

The loan-to-value ratio is the share of the value that the bank grants as a loan. It is not a legal norm, but banking practice: no law prescribes it, each bank sets it itself and makes it dependent on your income, your age and the property. For buyers who are not tax-resident in Spain, it is regularly significantly lower than what residents get. Only the ratio that your bank tells you in writing is binding; enter it into the calculator instead of planning with a rule-of-thumb figure. How financing for non-residents basically works, which documents the bank wants to see and how long the review takes, you can read in our overview on financing without Spanish residency.

It also matters what the bank applies its ratio to. It doesn't calculate based on the purchase price, but on the lower of the two values from the purchase price and the tasación. The tasación is the valuation report from a valuation company licensed in Spain, which the bank requires before approval. If this valuation comes out lower than the agreed price, the loan decreases, your equity requirement increases, and your budget shrinks. What the valuation costs, who commissions it and why it almost always comes in below the market price, we explain under the Valuation by Spanish surveyors.

What the additional costs consist of

The largest block of additional costs is tax, and which one you pay depends solely on whether the property is new or resale. The two are mutually exclusive:

• Resale property (seller is a private individual or the property has already been lived in): the property transfer tax ITP applies, in Spanish Impuesto sobre Transmisiones Patrimoniales. In the Balearics it is staggered and ranges from 8% at the lowest level up to 13% at the highest. So the rate rises with the purchase price, and each bracket applies only to the portion of the price that falls within it — not the entire amount at the top rate.
• New build from a developer: instead of the ITP, you pay the value added tax IVA (Impuesto sobre el Valor Añadido) to the seller, here at a rate of 10%. On top of that comes the stamp duty AJD (Actos Jurídicos Documentados), a levy on the notarial deed itself, normally 1.5%. Above a deed amount of €1,000,000 a higher AJD rate applies in the Balearics.

At the end of the day, new build is more expensive from a tax perspective than resale. With the same equity, your maximum purchase price is therefore lower if you buy from a developer. We cover the mechanics of both taxes and the question of when a property counts as "new" in detail in the overview of property transfer tax in the Balearics.

The second block is the deed costs. The Notario, the Spanish notary, notarises the purchase contract as an escritura pública, i.e. as a public deed, and without this deed there can be no registration. The Registro de la Propiedad, the Spanish land registry, then registers you as the owner. Both charge according to the Arancel, an official fee schedule from 1989 that sets fixed rates per value bracket. These fees increase with the price, but degressively: if the purchase price doubles, the notary costs do not double. What else turns up on these invoices, from copies to powers of attorney, is set out in our breakdown of the procedure and fees at the Spanish notary appointment.

On top of that comes a base amount that is almost independent of the price: lawyer, gestoría and the review of the documents. The gestoría is a Spanish administrative office that files tax declarations, follows up the registration and handles official errands for you. The Nota Simple, the simple land registry extract showing the owner, size and charges on a property, is also one of the small items that always arise. For an inexpensive property this base amount weighs heavily as a percentage, for an expensive property hardly at all. You'll find every single item in the full breakdown of the additional purchase costs in Mallorca.

Worked examples

The specific figures are provided by the calculator above as soon as you've entered your equity, loan-to-value ratio and property type. Three patterns are worth watching out for.

First, the leverage effect. Increase the loan-to-value ratio by just a few points, and the possible purchase price jumps more than most people expect. The reason: the equity share is the difference to one hundred per cent, and a small change to it shifts your calculation noticeably. A conversation with a second bank is almost always worthwhile.

Second, the new-build discount. If you switch from resale to new-build with identical equity, the budget drops significantly, even though nothing about the financing has changed. The higher tax burden eats into equity that is then missing for the purchase-price share.

Third, the base effect. With small budgets, fixed costs make up an uncomfortably large share. Anyone calculating tightly should set the buffer rather generously, because translations, powers of attorney and an extra notarisation quickly add up.

Important: what the calculator outputs is an upper limit, not a target figure. There should be something left over for ongoing costs after the purchase, for minor repairs, and for the first tax return.

Special cases

• The tasación is below the purchase price. The bank calculates its ratio on the lower of the two values, and you cover the gap additionally from equity. The calculator has no separate field for the appraisal value — work around this by lowering the loan-to-value ratio accordingly: a ratio applied to an appraisal that is below the purchase price is, relative to the purchase price, always the smaller number. How the valuation process works is explained under Valuation by the Spanish bank.
• Capital is held in Germany. Equity from a German brokerage account or a German property can be used, but it must be available in time and its origin must be verifiable; Spanish banks and notaries require proof. What to watch out for here is explained under Bringing German capital into a Spanish purchase.
• High purchase price. Above a certain notarised amount, namely €6,010,121.04, the Arancel no longer prescribes a fixed rate: the notary sets their fee freely in that case. For such properties, the calculation is only an upward guide, and a cost estimate before the appointment is mandatory.
• With new-builds, the budget hits a ceiling at one particular point. Above a certain notarised amount, a higher rate of the AJD stamp duty applies in the Balearics. Anyone who lands just below this sees the same maximum price across an entire range of additional equity: the next euro of purchase price suddenly costs several thousand euros more in cash. This isn't a calculation error but the threshold itself — and a good reason to stay below it in negotiations.
• Purchase without financing. If you pay in cash, the ratio no longer applies, but the incidental costs still do. Set the financing to zero, and the calculator shows you how much of your purchase price remains after taxes and fees.
• Buying as a couple or through a company.Multiple buyers don't change the tax logic, but they do change the bank's assessment. Buying through a company is subject to its own rules, which this calculator doesn't cover.

What the calculator doesn't include: the costs of financing

The additional costs above are those of the purchase. The mortgage itself generates its own costs, and since 2019 these have been allocated by law. Under Article 14(1)(e) of Ley 5/2019 on real estate credit agreements, the lender bears the notary fee for the loan deed, the registration of the mortgage in the Registro de la Propiedad (Land Registry), and the gestoría fee for the financing. The stamp duty (AJD) on the mortgage deed is likewise borne by the bank — although that isn't set out in Ley 5/2019, but in Article 29 of the law on Transfer Tax and Stamp Duty, as amended by Real Decreto-ley 17/2018.

The same rule explicitly assigns one item to you: the tasación, the valuation report with which the bank appraises the property. That's why the calculator has a separate field for it, pre-filled with zero — there's no official fee schedule for valuations, and the price will be quoted to you by your bank or the valuation company. Enter what you've been told, and the budget will take it into account.

This doesn't make the list of financing costs complete, nor is it meant to. If the bank agrees an arrangement fee (comisión de apertura), you bear it — Article 14(4) of the same Ley 5/2019 explicitly permits it, but requires that it be charged only once and cover all processing costs. On top of that, there's usually a building insurance policy that the lender is entitled to require. This calculator doesn't factor in either of these; ask about both when reviewing the bank's offer. For how Spanish mortgages work overall for non-residents, see Financing without a tax residence in Spain.

Deadlines and forms

When buying an existing property, you file the transfer tax return using Modelo 600, the tax form of the Balearic tax authority ATIB, within one month of signing the escritura. In practice, the gestoría handles this, often the day after the notary appointment, because the Registro won't record the transfer without proof of tax payment.

With a new build, it works differently: you don't pay the IVA to the tax office but together with the purchase price to the developer, who passes it on. You file the stamp duty (AJD) return yourself, using Modelo 601, likewise within one month of signing the escritura.

So don't keep the money for the tax in a long-term investment. It falls due shortly after the appointment, not weeks later.

Legal basis and current status

Transfer tax and stamp duty are governed by the Spanish law on Transfer Tax and Stamp Duty; the rates are set independently by the Balearics as an autonomous region and are regularly adjusted. VAT follows the national VAT Act. Notary and registry fees are governed by the Arancel of 1989, together with its later amendments.

An assumption is built into every line of the calculation, and it needs to be disclosed: the calculator charges you with all the costs of the purchase deed. The law does not provide for this. Article 1455 of the Código Civil states that the costs of notarisation fall on the seller, and only the first copy and everything that follows fall on the buyer — but explicitly only salvo pacto en contrario, i.e. unless otherwise agreed. On Mallorca, it is practically always agreed that the buyer bears everything, and this calculation is based on that. It is a statement about the usual contractual arrangement, not a legal consequence — and a point that can be negotiated.

The calculator reflects the currently applicable rates for the Balearics and assumes that you are not tax-resident in Spain and are buying the property as a private individual. It does not replace tax or legal advice. For a binding calculation of your specific case, you need the offer from your bank and a cost breakdown from your lawyer or gestoría.

Frequently asked questions

Related calculators

• If you already know the purchase price and want to know what comes on top, work through the total additional costs for your specific property.
• For the pure tax on an existing property, use the Calculation of Balearic property transfer tax by bracket.
• You can estimate the deed costs alone using the Fees for notary and land registry.
• To find out in advance how much loan is realistically available, check the Loan for buyers without Spanish residency.