Be quick and save taxes!

The Balearic Islands are more popular than almost any other destination in Europe, not only as a vacation destination but also among international property buyers. Germans in particular benefit from the extremely short flight time of just over two hours and the excellent flight connections. Unfortunately, the government on the Balearic Islands has also recognized the privileged location and wants to profit from the boom in Mallorcan real estate. At present, the land transfer tax is 11.5 percent, which already puts the Balearic island in first place in a Spanish comparison. But now the tax is set to rise again, to 12 or 13 percent from January 2023, depending on the purchase price. For a house worth 2 million euros, this can amount to a whopping 30,000 euros! If you're a last-minute buyer, you can use this money to buy a new car or a luxury kitchen instead of paying this sum to the Spanish tax authorities. It should also be borne in mind that this is already the third tax increase in the term of office of the left-wing government made up of the Socialists and the Podemos party. The latter had demanded the tax reform and have now pushed it through parliament. The property transfer tax (impuesto de transmisiones patrimoniales), or ITP for short, has now become one of the leading sources of income for the agencia tributaria de los Baleares. Unfortunately, it cannot therefore be ruled out that the increase now announced will not be the last. It is therefore a good idea not to wait any longer and to fulfill your dream of owning your own home in Mallorca today.

An attractive investment: property in Mallorca

In addition to the rising property transfer tax, there is no end in sight to the increase in the value of houses and condominiums on the largest island in the Balearic Islands. On the contrary, in the first quarter of this year alone, prices rose again by almost 20 percent. This means that neither the gas crisis nor the war in Ukraine are having a negative impact. When you buy a house in Mallorca, you not only get a top property in one of the most attractive locations in the world, but also an excellent investment. This gives you the peace of mind that you are not only buying a luxury property in the Mediterranean climate, but that you will also achieve above-average returns every year. A property in Mallorca also offers a unique investment opportunity for renting out. This may be the reason why property transfer tax is so high here on the Balearic Islands. The Balearic government is well aware that it would be difficult to find a similarly attractive place for vacation and permanent residence anywhere near Germany. Leaving the cold and gray weather of Germany behind and looking for a permanent home in the Mediterranean is probably at the top of most Germans' wish list. In the long term, it is to be feared that prices will skyrocket to unattainable heights due to the constantly increasing demand and simultaneously shrinking supply.

Conclusion: now is the best time to buy

Our tip: Take a look at what is currently on offer and don't put off making a decision. At the moment, fincas, villas and townhouses in very attractive locations are still available at reasonable prices. However, nobody can tell you for how long. The current Spanish government is known for its spontaneous decisions and creativity when it comes to tax increases. We will be happy to answer your questions and help you with the formalities.