Impuesto sobre Transmissiones Patrimoniales
I. The property transfer tax for resale properties is paid by the purchaser.
The tax ranges from 8% to 11% in the Balearic and it depends on the purchase price as shown in the public deed. For example: 8% is due to be paid for the purchase of a property up to 400.000 €. 9% will be paid for the difference between 400.001 €to 600.000 €, 10% from 600.001 € to 1.000.000 € and 11% above 1.000.000 €.
II. The property transfer tax for newly – built properties is also paid by the purchaser
The tax is applied on the purchase of newly built properties, which are bought directly from the developer. In this case the purchaser must pay IVA (or VAT) of 10% instead of paying the normal property transfer tax. There is also a stamp duty (or IAJD) of approximately 1.2%, which must be paid on top of the purchase price.
III. The increase of the land tax – Plusvalía Municipal
The ‘Plusvalía Municipal’ is a tax on the increase of the value of the ground the property occupies. On rustic land the calculation is based just on the ground floor area the property occupies. The tax for urban properties is for the entire land.
The plusvalía is calculated on the basis of 3 factors: the period of ownership, the location of the property and the cadastral ground value.
The plusvalía tax is paid by the vendor.