Tax hike on mallorca and ibiza property deals

Property sales in Mallorca and Ibiza are to be taxed in price bands from 01 April with high value fincas, villas and mansions involved in private sales having a record 10% ITP (Impuesto de Transmisión del Patrimonio) tax charged to the buyer.

The move follows a meeting of the Balearics Regional Government, called to bolster public sector revenue following budget cuts ordered by the new PP Central Government.

Balearics ministers decided to raise fuel tax and then to increase revenue from property transfer tax that, at 7%, has been traditionally lower than the 8% ITP levied across mainland Spain. The ITP hike was targeted “at taxpayers with greater ability to pay”.

• Base ITP tax rate - 7%
  
• Up to EUR 300,000 ITP - 7%
  
• From EUR 300,000 to EUR 500,000 - 8%
  
• From EUR 500,000 to EUR 700,000 - 9%
  
• From EUR 700,000 - 10% 

Source: PropertyinSpain.net