How to Buy Property in Mallorca: A Step-by-Step Guide for Foreign Buyers

Buying property in Mallorca as a foreign buyer is an exciting journey — but the process differs significantly from what most Europeans or international buyers are used to. From obtaining your NIE number to signing the final deed at the notary, each step requires careful preparation.

This complete guide walks you through every stage of buying property in Mallorca, so you know exactly what to expect.

Step 1: Define Your Budget (Including All Costs)

Before you start viewing properties, get crystal clear on your total budget — not just the purchase price, but all associated costs.

When buying property in Mallorca as a non-resident, you should budget an additional 10–13% on top of the purchase price to cover:

Property Transfer Tax (ITP): This is the main tax for resale properties and is calculated on a sliding scale in the Balearic Islands: 8% on the first €400,000, 9% on €400,001–€600,000, 10% on €600,001–€1,000,000, and 11.5% above €1,000,000. For new-build properties, VAT (IVA) applies at 10% instead of ITP.

Notary and land registry fees: Typically 1–1.5% of the purchase price.

Legal fees: Your solicitor (abogado) will charge approximately 1–1.5%, and this is money very well spent.

Mortgage arrangement costs (if applicable): Bank valuation, arrangement fees, and stamp duty.

Pro tip: Always work with a currency specialist rather than your bank when transferring large sums — the exchange rate difference can save or cost you thousands.

Step 2: Apply for Your NIE Number Early

The NIE (Número de Identificación de Extranjero) is your Spanish tax identification number. Without it, you cannot buy property, open a bank account, or pay taxes in Spain.

Apply as early as possible — processing times at the Spanish consulate or local police station in Mallorca can take several weeks. You can apply in person at the Policía Nacional in Palma, or through a gestoria (local administrative agent) who can handle it on your behalf. Power of attorney is also an option if you are not yet in Spain.

Step 3: Open a Spanish Bank Account

You will need a Spanish bank account to pay the purchase price, cover taxes, and handle ongoing expenses like utility bills and community fees after purchase.

Most major Spanish banks — Caixabank, Bankinter, Sabadell — offer non-resident accounts. You will need your NIE, passport, proof of address, and evidence of income or funds. Some banks now offer online account opening for non-residents.

Step 4: Appoint an Independent Solicitor (Abogado)

This is one of the most important steps, and one that foreign buyers sometimes skip — do not make this mistake. Your solicitor must be independent from the estate agent and the seller.

A good abogado will carry out full legal due diligence on the property, review all contracts before you sign, advise on the tax implications of your purchase, represent you at the notary if you cannot attend in person, and assist with the post-completion formalities.

Coast Projects works with a network of trusted, independent solicitors in Mallorca who specialise in conveyancing for foreign buyers.

Step 5: Start Your Property Search

With your budget, NIE application in progress, and solicitor appointed, you are ready to search for properties. In Mallorca, most transactions go through estate agents (inmobiliarias), though some properties are sold privately.

Key areas popular with foreign buyers include: Southwest Mallorca (Santa Ponsa, Portals Nous, Bendinat) for its proximity to Palma and international schools; the Southwest Coast (Port Andratx, Camp de Mar, Paguera) for dramatic sea views; the North (Pollença, Alcúdia) for traditional village life; and the Southeast (Santanyí, Cala d'Or) for unspoiled beaches and rural fincas.

Step 6: Make an Offer and Sign the Reservation Contract

When you find the right property, the process typically starts with a verbal offer, followed by a written offer. Once accepted, a Reservation Contract (Contrato de Reserva) is signed and a reservation deposit of typically €3,000–€10,000 is paid. This takes the property off the market while due diligence is carried out.

Your solicitor should review the reservation contract before you sign. The deposit is usually non-refundable if you withdraw without legal cause — but is fully refundable if due diligence reveals a serious legal issue with the property.

Step 7: Legal Due Diligence

While the reservation is in place, your solicitor will carry out comprehensive due diligence. This is the critical protection stage for buying property in Mallorca and covers:

Nota Simple: The official land registry extract confirming ownership, boundaries, mortgages, and charges on the property.

Urban planning status: Confirming the property is correctly classified and that no illegal constructions exist.

Building legality: Confirming the property has a valid building licence and first occupation licence (Licencia de Primera Ocupación — LPO).

IBI and community fees: Confirming all municipal taxes and community charges are up to date.

Utility connections: Confirming legal connections to water, electricity, and drainage.

This stage typically takes 2–4 weeks. If any issues are found, your solicitor will advise whether they are resolvable or whether you should withdraw.

Step 8: Sign the Private Purchase Contract (Contrato de Arras)

Once due diligence is satisfactory, the parties sign the Contrato de Arras (Private Purchase Contract). At this stage, the buyer pays 10% of the purchase price (less the reservation deposit already paid).

This contract legally binds both parties. If the buyer withdraws, they forfeit the deposit. If the seller withdraws, they must repay double the deposit. The contract sets a completion date — typically 4–8 weeks after signing the arras.

Step 9: Arrange Your Mortgage (If Required)

Non-resident buyers can obtain Spanish mortgages, though conditions are more restrictive than for residents. Spanish banks typically lend 60–70% loan-to-value for non-residents, compared to 80% for residents.

The mortgage application process — including bank valuation and approval — typically takes 4–6 weeks. Begin this process as early as possible, ideally before signing the arras. Your solicitor or Coast Projects can recommend independent mortgage brokers who specialise in non-resident finance.

Step 10: Complete at the Notary (Escritura de Compraventa)

Completion takes place before a Spanish Notary (Notario). The Escritura de Compraventa (Public Deed of Sale) is signed by both buyer and seller (or their legal representatives with power of attorney). The remaining purchase price is paid, typically via bank transfer or banker's draft. The notary witnesses the transaction and the deed is then registered at the Land Registry.

Post-completion, your solicitor will handle payment of ITP or IVA tax (within 30 days of completion), registration of the title deed at the Land Registry, change of name for IBI (municipal tax), and connection of utilities in your name.

What Happens After Completion?

Once you own your property in Mallorca, you will need to consider:

Non-resident income tax (IRNR): Even if you do not rent the property, Spanish law imposes an annual deemed income tax on non-resident owners. Your solicitor or a local gestor can handle this.

Community fees: If your property is in a community (urbanización), monthly community fees apply.

Home insurance: Arrange building and contents insurance from day one.

Property management: If you are not based in Mallorca full-time, a property manager can handle maintenance, utilities, and any rental management.

How Long Does the Process Take?

The typical timeline for buying property in Mallorca from accepted offer to completion is 8–16 weeks, depending on the complexity of due diligence, mortgage requirements, and the flexibility of both parties.

Ready to Buy Property in Mallorca?

At Coast Projects, we guide foreign buyers through every stage of the property purchase process in Mallorca. From the initial property search to post-completion support, our team is here to make your purchase smooth, secure, and stress-free.

Contact Coast Projects today for an initial consultation.