What does it cost to own a property in Mallorca?
Dreams of owning a home in Mallorca include stunning views, serene lifestyle, and a Mediterranean paradise. But before deciding to buy, get an overview of the fixed expenses. Read on to learn about owning a home in Mallorca costs and fees – and get no surprises as a Mallorcan homeowner
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Fixed expenses as a homeowner in Mallorca
For many, buying real estate in Mallorca is the realization of a long-held dream. However, it’s essential to keep a clear head and consider: How much does it cost to own a home in Mallorca?
The costs of being a homeowner in Spain are generally lower than in other european countries. You’ll need to set aside a monthly amount for future repairs and consider fixed expenses such as electricity, water, gas, insurance, banking, and common expenses (e.g., in a housing association).
Read more about the best insurance options in Mallorca.
Property tax in your own country
In addition to local taxes, you may need to pay property tax to your home country. For example, Danish residents owning property in Spain must pay a 1% tax on the purchase value in the deed. Consult your national tax office for guidance. (In Denmark, the rates are 1% up to DKK 3 million and 3% above.) You must report both interest expenses on loans and the basis for calculating the property value tax on your tax return. Seek guidance from your local tax office if in doubt.
Spanish Property Tax – IBI
IBI (Impuesto Sobre Bienes Inmuebles) is the annual property tax paid to the local municipality based on the property value (valor cadastral). It typically ranges from 150 to 500 euros/year, depending on factors like size, quality, location, and age. You can pay IBI directly to the town hall or via your Spanish bank.
Spanish Tax – IRNR
IRNR (Impuesto sobre la Renta de No Residentes) is a tax for non-residents who use their Spanish home as a holiday home for less than 180 days a year.
If you don’t rent out your property, IRNR is calculated as a percentage (19% or 24%) of the property’s value. It must be declared and paid annually via FORM 210. A lawyer or similar professional is recommended to handle this.
Spanish waste disposal tax
Homeowners in Mallorca must pay a waste disposal fee (Basura), currently around 130 euros/year in Palma. This fee is paid directly to the town hall or can be set up for payment via your Spanish bank.
More about owning a home in Mallorca costs and fees after the video section
Video (will be updated)
Income from renting out your holiday home
If your dream involves rental income from holidaymakers, you need a tourist license, which can be challenging to obtain if the property doesn’t already have one.
If you have a tourist license, ensure you have good contents insurance and consult the housing association. Rental income must be declared and taxed annually. Consult with a legal expert on the tourist rental market, as laws and requirements are continually evolving.
Owning a home in Mallorca costs and Fees: 5 important expenses
- Property taxes: Understand local taxes like IBI (Impuesto Sobre Bienes Inmuebles), IRNR (Impuesto sobre la Renta de No Residentes) and potential taxes in your home country.
- Maintenance and utilities: Budget for regular maintenance, electricity, water, gas, and insurance expenses.
- Legal and administrative fees: Include costs for legal services and community fees.
- Waste disposal and Community Fees: Pay for waste disposal (Basura).
- Rental Income Taxes: If renting out your property, be aware of tax obligations and the need for a tourist license.
Final thoughts of owning a home in Mallorca costs and fees
Owning a home in Mallorca involves various costs and fees, from property taxes to maintenance and utilities. Understanding these expenses is crucial for budgeting and ensuring a smooth homeownership experience on this beautiful island.
Do you want to know more about real estate in Mallorca – read our theme, or join our Facebook group “Mallorca Visuals” for authentic Mallorca videos.
Read our travel guides to Mallorca’s captivating destinations, from the vibrant city life in stunning Palma to the sun-soaked shores of Alcudia and Puerto de Pollença. Don’t miss the charming mountain villages of Sóller and Deià , where nature and tradition blend harmoniously. Also take a look at the hot spot for wine lovers – Binissalem.
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