Spanish Tax for British Expats in the Balearic Islands — 2026 Guide

The Balearic Islands apply a progressive ITP scale on resale property, one of the steepest in Spain: 8% up to €400,000, 9% from €400,000 to €600,000, 10% from €600,000 to €1,000,000, 11% from €1,000,000 to €2,000,000, 12% from €2,000,000 to €4,000,000, and 13% above €4,000,000 (Decreto Legislativo 1/2014 Illes Balears, as updated). New builds carry 10% VAT plus 1.2% AJD instead. On a €1.5m Mallorca villa this can mean over €165,000 in transfer tax alone — always get an ITP estimate before making an offer.

The national ISD scale (Ley 29/1987) applies as the starting point, with brackets and multipliers based on the relationship and pre-existing wealth of the heir. Unlike Andalusia or Madrid, the Balearic Islands offer only a modest reduction for direct family (Groups I and II) rather than a near-total exemption — expect real tax to pay, not a symbolic amount. Since the 2015 reform (RDL 17/2015, implementing ECJ Case C-127/12), UK nationals as non-EU residents can apply Balearic regional rules rather than the less favourable state default. File Modelo 650 with the Agència Tributària de les Illes Balears within 6 months of death.

Only if it holds a valid ETV (Estancias Turísticas en Viviendas) licence under Decreto 20/2015 and its 2018 reform (Ley 6/2017 and subsequent municipal zoning plans). Many municipalities, including Palma, have frozen or capped new tourist-rental licences in dense zones since 2018 — buying a property assuming you can list it on Airbnb without checking the licence status first is one of the most common costly mistakes among British buyers. Non-resident owners pay IRNR at 24% (non-EU rate) on gross rental income via quarterly Modelo 210; no expenses are deductible for non-EU landlords.

Yes. Unlike Madrid, the Balearic Islands have not abolished wealth tax and apply their own regional scale under Ley 6/2007, generally with a lower exemption threshold than the €700,000 state default in some brackets and higher marginal rates at the top. Non-residents are taxed only on assets located in Spain (obligación real) — broadly your Balearic property, minus any mortgage debt directly linked to it. This is a meaningful annual cost that is often underestimated when budgeting for a Mallorca purchase.

Real Decreto 664/2023 requires a minimum €500,000 property investment free of mortgage or encumbrances to obtain a 1-year Visado de Inversor, renewable as a 2-year Autorización de Residencia de Inversor. The Balearic Islands, and Mallorca in particular, are among the highest-value property markets in Spain, so this threshold is reached relatively easily on a family villa. The Golden Visa alone does not make you a Spanish tax resident — that still depends on spending 183+ days in Spain in a calendar year under Art. 9 Ley 35/2006 (IRPF).

You need a NIE (Número de Identidad de Extranjero), a Spanish bank account, and proof of funds compliant with anti-money-laundering rules (Ley 10/2010). A Spanish lawyer for due diligence — checking rustic-land building restrictions, coastal law (Ley de Costas) setbacks common on the islands, and any tourist-licence status — is strongly recommended. Since Brexit, UK buyers are non-EU nationals with no special free-movement rights, subject to the same NIE and residency process as US or Australian buyers.