Luxury property in Mallorca

The tax on luxury properties in many regions is between 7% and 8%.

Andrew EdePalma24/07/2022 08:01
TW0

In the Balearics, the property transfer tax on sales of luxury homes of one million euros and more is 11.5%. The average tax rate is 8%, but there is now a special rate of 5% for the purchase of a first home so long as the price does not exceed 200,000 euros.

The 11.5% is the highest rate in the country, followed by Catalonia and Extremadura with 11%. In the majority of regions, the tax for the most expensive homes is between 7% and 8%, though in Madrid it is 6%. Madrid has a 6% rate regardless of the price of the property, but an exception is made for large families, for whom the rate is 4%.

Certain regions have cut taxes for specific sectors of the population. In Andalusia, Galicia and Murcia, for instance, there are rates of between 3% and 3.5% for the under-35s. The Partido Popular opposition in the Balearics argue that some of these measures should be adopted. Spokesperson Antoni Costa believes that there is room to lower the tax, which is a key source of financing for the Balearic government. For instance, he advocates 2% for those under 35.

The government is in general not in favour of lowering taxes, revenue from which is used to finance public services. The finance minister, Rosario Sánchez, says that data support the government's progressive fiscal policy - "a fair policy in which those who have the most pay more".

The PP's proposals for tax reform will be debated and voted on in parliament on Tuesday.