ITP Baleares 2026: rates, thresholds and reductions explained

Discover the changes to ITP Baleares 2026 rates and thresholds, helping you understand potential savings on property taxes in the Balearic Islands.

What has genuinely changed this year is not the rates themselves but the income and price thresholds that decide who qualifies for a reduced rate. Following Order 5/2026 and later Law 4/2026, the price ceiling for accessing bonifications in Mallorca and Menorca has been raised to levels above previous limits, while Ibiza and Formentera have a higher ceiling reflecting their steeper property market.

None of these reductions applies to the whole price. They apply only up to a statutory lower threshold, with anything above taxed at the standard scale. The Agència Tributària de les Illes Balears confirms the operative figures, and the Govern de les Illes Balears sets out how the new thresholds apply retroactively from 1 March 2026.

  • General scale: 8% up to €400,000, 9% up to €600,000, 10% up to €1,000,000, 12% up to €2,000,000, 13% beyond that.
  • Island thresholds for bonifications: €331,859.70 (Mallorca and Menorca) and €378,212 (Ibiza and Formentera).
  • Reduced rates: 4% for main residences, 2% for under-36s, larger families and disabled buyers, and 0% in specific qualifying cases.

Key Takeaways

Point Details
Progressive scale ITP runs from 8% up to €400,000 to 13% above €2,000,000, applied progressively by tranche.
Island thresholds matter Mallorca and Menorca’s bonification ceiling is €331,859.70; Ibiza and Formentera’s is €378,212.
Reductions are capped The 4%, 2% or 0% rates only apply to the first €270,151.20 of value, not the whole price.
New-build differs from resale Developer sales attract VAT (10%) plus AJD (1.5% to 2%), rather than ITP.
Vogue Properties Mallorca supports buyers The agency coordinates with local gestorías and notaries so tax steps and deadlines are handled correctly.

Table of Contents

What is ITP Baleares 2026 and how does the scale apply?

ITP is the tax you pay when buying a second-hand home from a private seller in the Balearic Islands. It replaces VAT for resale properties and is calculated on a progressive scale that only taxes each portion of the price at its own rate, in the same way income tax works. Buyers frequently assume the top rate applies to the whole purchase price. It doesn’t, and understanding the marginal mechanism is the difference between overestimating your costs by tens of thousands of euros and getting your budgeting right from day one.

Diagram of ITP progressive tax thresholds and rates

The 2026 tranches work like this: the first €400,000 of value is taxed at 8%, the slice between €400,000 and €600,000 at 9%, between €600,000 and €1,000,000 at 10%, between €1,000,000 and €2,000,000 at 12%, and anything above €2,000,000 at 13%.

Here’s how that plays out in practice for three common Mallorca price points:

  1. A €300,000 apartment: The entire amount falls in the first tranche, so ITP is 8% of €300,000, which comes to €24,000.
  2. A €500,000 townhouse: The first €400,000 is taxed at 8% (€32,000), and the remaining €100,000 at 9% (€9,000), giving total ITP of €41,000.
  3. An €800,000 villa: The first €400,000 is taxed at 8% (€32,000), the next €200,000 at 9% (€18,000), and the final €200,000 at 10% (€20,000), for a total of €70,000.
Tranche (value) Marginal rate Tax on that tranche
Up to €400,000 8% €32,000
€400,000 to €600,000 9% €18,000
€600,000 to €1,000,000 10% €41,000
€1,000,000 to €2,000,000 12% €70,000
Above €2,000,000 13% Variable

One point worth flagging before you sign anything: ATIB doesn’t always accept the declared purchase price at face value. If the figure written into the contract sits noticeably below the reference or cadastral value, the tax office can open a verification procedure and reassess ITP on the higher figure. Notaries and registrars regularly point to this as the single most common source of post-completion disputes, so it pays to keep evidence of how the price was negotiated, including any independent valuation and the deposit contract, according to guidance from the Colegio de Registradores.

Who qualifies for reduced ITP rates in the Balearics?

Not every buyer pays the general scale. The Balearic government offers three separate reduction tiers, each with its own conditions, and it’s worth checking whether you fit one before you assume the full rate applies to your purchase.

  • 4% reduced rate: available to buyers acquiring their main, habitual residence, provided the property value sits within the island’s bonification threshold. In Mallorca, that ceiling is now €331,859.70, following the adjustment brought in under Law 4/2026.
  • 2% reduced rate: aimed at under-36s, members of large or single-parent families, and buyers with a recognised disability, again subject to the same island price ceilings.
  • 0% bonification: a full exemption available in narrower circumstances, typically for under-30 buyers or disabled buyers who meet specific residency requirements, take out a mortgage covering a minimum proportion of the price, and stay within defined income limits.

Here’s the part buyers often get wrong: none of these reductions covers the entire purchase price, no matter how far under the island threshold your property sits. The lower rate only applies to the first €270,151.20 of declared value. Everything above that statutory amount reverts to the general progressive scale. Local tax advisors and guides aimed at foreign buyers stress this repeatedly, because the threshold increase in 2026 is easy to misread as a blanket exemption when it isn’t one.

Pro Tip: Ask your gestoría to run both scenarios, general scale and reduced rate, before you sign the arras contract. The difference on a mid-market Mallorca property can easily run into several thousand euros, and it changes how much cash you need at completion.

Calculator and documents on Mallorca villa terrace

ITP or VAT and AJD: which applies to your purchase?

The tax treatment of your purchase hinges on one simple question: is the seller a private individual or a developer selling for the first time?

Buy a resale home from a private owner, and ITP applies on the progressive scale already covered above. AJD in the Balearics generally runs around 1.5%, though Mallorca notes a higher 2% rate applies at the top end of the market for higher-value transactions.

Purchase type Applicable tax Typical rate
Resale property (private seller) ITP 8% to 13%, progressive
New-build (developer sale) VAT + AJD 10% VAT + 1.5% to 2% AJD

Take a €500,000 property as an example. Under ITP, as shown earlier, the tax comes to €41,000. New-build purchases generally carry a heavier tax load, which is worth factoring into any comparison between a resale villa and an off-plan development.

One nuance worth knowing: in certain circumstances, a developer can choose to waive the VAT exemption on specific transactions, which shifts the tax treatment. It’s a technical point, but it’s exactly the kind of detail a good local adviser checks before you commit funds.

How do you file and pay ITP in the Balearic Islands?

ITP isn’t collected automatically at completion. You, or more realistically your gestoría, must self-assess and pay it using Model 600, the standard autoliquidation form recognised across Spain and administered locally through ATIB.

  1. Gather the signed purchase deed (escritura), your NIE, proof of payment, and the property’s cadastral reference.
  2. Complete Model 600 with the declared price and applicable rate, following the procedural guidance published by the Agencia Tributaria.
  3. Submit and pay within one month of the signing date, since this is a strict deadline, not a guideline.
  • Missing the deadline triggers a recargo, a late-filing surcharge, on top of accruing interest.
  • Most gestorías recommend starting the paperwork within days of signing rather than waiting until the deadline approaches, since document gathering and bank transfers take time.
  • Keep copies of everything submitted; ATIB can request supporting evidence during a later review.

What changed under Order 5/2026 and Law 4/2026?

Two pieces of Balearic legislation reshaped the bonification landscape this year, and the timing matters if you completed a purchase earlier in 2026.

  • Order 5/2026, effective from 1 March 2026, raised the Mallorca threshold for accessing ITP bonifications to €307,089, widening eligibility for buyers who previously sat just above the old cap.
  • Law 4/2026, passed in June, revised that figure upward again and set the current statutory floor at €331,859.70 for Mallorca and Menorca, and €378,212 for Ibiza and Formentera.
  • Both changes apply retroactively to 1 March 2026, meaning buyers who completed purchases between that date and the law’s passage may be entitled to reassess their ITP liability under the higher threshold.

The CAIB press release framed the increase as a direct response to rising property values pricing more buyers out of existing bonifications. Anyone unsure which version of the rules applied to their specific completion date should check the primary text through BOIB or confirm directly with ATIB.

A practical checklist before you sign

Knowing the rates is one thing. Getting the paperwork right so you don’t overpay, or get caught by a late reassessment, is another matter entirely. Before you commit to a Mallorca purchase, work through this sequence.

  1. Request the nota simple from the Land Registry to confirm ownership, boundaries and any outstanding charges on the property.
  2. Check the energy performance certificate (certificado energético) and the last IBI (local property tax) receipts to confirm there are no arrears.
  3. Verify community fee debts if the property sits within a shared development, since unpaid community charges can transfer to the new owner.
  4. Confirm whether ITP or VAT applies to your specific purchase, and ask for a pre-signing ITP estimate in writing.
  5. Set aside funds beyond the headline price for ITP, notary fees and registry costs, and allow processing time for Model 600 before completion.

Pro Tip: Build a protective clause into the arras contract stating that if ATIB later re-characterises the declared value, responsibility for any resulting surcharge is clearly allocated between buyer and seller. It’s a small addition that avoids a large argument later.

Vogue Properties Mallorca’s buyer guide walks international clients through exactly this sequence for every transaction, coordinating with trusted local notaries and gestorías so nothing gets missed between offer and completion.

An adviser’s note on buying in Mallorca this year

The 2026 threshold changes have noticeably shifted buyer behaviour. More clients are now asking upfront whether their target price sits inside or outside the bonification band, rather than discovering the answer after signing. That’s a healthy change.

It’s an easy assumption to make and an expensive one to get wrong. If your purchase price sits close to either the island threshold or the statutory reduction cap, it’s worth getting a written estimate from a local adviser before you commit, rather than relying on a rough online calculation.

— Sophie

How Vogue Properties Mallorca supports your purchase

Working out ITP is only one part of a Mallorca purchase. The bigger challenge for most international buyers is coordinating the whole transaction, from negotiating contract clauses that protect you if ATIB later questions the declared value, to knowing which notary and gestoría to trust with a six-figure sum.

Vogue Properties Mallorca

Vogue Properties Mallorca has spent over twenty years guiding international buyers through exactly this process, matching clients with properties suited to their lifestyle and budget while recommending trusted local advisers for the tax and legal side. Whether you’re weighing a resale finca against a new-build villa, or trying to work out which of the two tax regimes applies to a property you’ve fallen for, the agency’s local team can talk you through the practical implications before you make an offer. Browse the current portfolio of properties for sale in Mallorca, or explore the collection of luxury villas if you’re searching for something more distinctive, and get in touch to arrange a tailored conversation about your next step.

Sources

FAQ

What is the ITP threshold for reduced rates in Mallorca?

Following Law 4/2026, the bonification threshold for Mallorca and Menorca is €331,859.70, while Ibiza and Formentera use a higher ceiling of €378,212.

Does the reduced ITP rate apply to the whole purchase price?

No.

What is the deadline for paying ITP after buying property?

You must file and pay ITP through Model 600 within one month of signing the purchase deed, or you risk a late-filing surcharge and interest.

Can Vogue Properties Mallorca help with the tax side of buying?

Vogue Properties Mallorca coordinates with trusted local gestorías and notaries so buyers understand their likely ITP liability and meet filing deadlines correctly.