NEW REGULATIONS FOR REAL ESTATE AGENCIES IN MALLORCA AND THE REST OF THE BALERIC ISLANDS

This came into effect November 2024 and aims to enhance professionalism and consumer protection in the real estate industry.

The key aspects of these new regulations are:

Registration requirements

Real estate agents operating in the Balearic Islands must now register with the Official Real Estate Registry of the Balearic Islands (ROAIIB)

To be eligible for registration, agents must meet several criteria:

1. Physical address: Agents must have a publicly accessible office with a postal address in the Balearic Islands.
2. Professional qualifications: Agents must demonstrate their expertise through minimum one of the following:
   • A university degree in relevant fields such as law, engineering, or architecture
   • At least 200 hours of specialized training in real estate
   • A minimum of 4 years of experience in the real estate sector

3. Insurance Requirements:

   • Liability insurance
   • Casualty insurance

Consumer protection measures

The new regulations emphasize transparency and consumer protection:

• Agents must provide detailed information about properties and assist clients in obtaining additional information from relevant sources.
• All real estate contracts must include the agent's official registration number.
• Agents must clearly establish marketing conditions through signed agreements with sellers.

Compliance and enforcement

• Non-compliance with these regulations is considered illegal and may result in sanctions.
• The regulations aim to eliminate "amateur agents" and ensure only qualified professionals operate in the market.

W Mallorca Invest's compliance

• 250 hours course on legislation on real estate and land and sale of these, in addition legislation on rental properties
• In June 2024, 5 years of proven experience in the real estate sector in Mallorca

• Operated by TodoWanre S.L.

• Membership number 00663 in ANAI/API (Asociación Nacional de Agentes Inmobiliarios y el Colegio Oficial de Agentes de la Propiedad Inmobiliaria)
• Registered in the official ROAIIB with number GOIBE605090/2024

This information assures clients that W Mallorca Invest meets the new legal requirements and is committed to professional standards in the Balearic real estate market.

Taxes when buying a property in Mallorca 2025

Property Transfer Tax (ITP)

When purchasing a second hand property in the Balearic Islands, this is subject to Property Transfer Tax (ITP). The determination of tax rates is the responsibility of the individual municipalities.

The following Property Transfer Tax applies:

• Up to €400.000: 8%.
• €400.001 – €600.000: 9%.
• €600.001 – €1.000.000: 10%.
• €1.000.001 – €2.000.000: 12%.
• €2.000.001 and above: 13%.

Additionally there is a Stamp Duty of 1,5% for properties valued up to €1.000.000 and 2% for properties over €1.000.000 €. Important to note is that these taxes must be paid withing 30 days of the property transfer.

For example, with a purchase price of €1.000.000 the tax is as follows:

• For the amount up to €400.000: The tax is 8% = €32.000.
• For the amount between €400.001 and €600.000: The tax is 9% = €18.000.
• For the amount between €600.001 and €1.000.000: The tax is 10% = €40.000.
• ⇒ The total tax amount is €90.000.

Garage spaces

For a garage space in a second hand residential building you pay a Property Transfer Tax of 8% up to €30.000 and 9% for values over €30.001.

Value Added Tax (IVA)

When buying a new built property you will not pay any Property Transfer Tax (ITP) as when purchasing a second hand property. Instead, you have to pay Value Added Tax (VAT or IVA in Spanish).

For new or fully renovated properties, a 10% Value Added Tax (VAT) applies.

For garage spaces in new residential properties, including up 2 parking spaces the VAT is also 10% of the purchase price.

Notarial or Stamp Duty

The notarial or stamp duty in the Balearic Islands is 1.5%. If the purchase price exceeds €1.000.000, the tax rate increases to 2%. Payment of stamp duty must be made within one month of signing the notarial deed.

Property tax – Impuesto de Bienes Inmuebles – IBI

This tax vary depending on the specific property and municipality. The annual property tax (IBI) is based on the cadastral value of the property and it´s paid to the local town hall.

This tax contributes to maintaining the local infrastructure, the amount varies, but is generally a manageable cost.

Garbage collection/recycling tax – basura

As from April 2025 a new garbage tax endorsed by the European Commission and aimed to reduce waste in line with European directives, will be introduced across Sapin. The costs for this tax in Mallorca is not yet specified. It´s collected by the town hall so it´s advisable to contact the local town hall where the property you aim to buy is located for exact figures. This tax have previously been a relatively small cost.