Summary of the correct way to tax for single-family homes with valid or provisional license registered in the Ministry of Tourism of the Balearic Government.

First, we must consider that the rent and sale of housing is in principle exempt from VAT. However, section “e'” of article 20.1.23ºb of the LIVA establishes that this exemption will not be effective in the case of leases of apartments or furnished homes when the lessor is obliged to provide any of the complementary services of the hotel industry, such as restaurant, cleaning, laundry or other similar. In these cases, the person who gives the house to the user has the obligation to issue VAT invoice, even if only one is the service provided.

The aspects to consider are the following:

  • -You must make the quarterly VAT declaration at 10%.
  • – You can deduct all direct expenses of the property such as: IBI, garbage, supplies, insurance, community expenses and real estate commission
  • -You must invoice the final customer with an IVA of 10%.
  • -The real estate or intermediary company charges its commission plus 21% VAT.
  • -The owner must not make model 130.
  • -The owner must declare the annual benefit in the section: Real estate capital yields of his annual income
    – It is not necessary to register in finance under the heading: Leases of business premises.

At Ripoll & Mateu Solicitors Mallorca we advise, defend and represent our clients at all levels. Our greatest asset is an infrastructure of professional leaders in each field of action, especially Real Estate and Tax and Tourism Law   as well as our international vocation and multilingual capacity.

Our team is committed to providing the best work processes to provide our customers with the best results, in a constant quest for professional excellence. We establish external collaboration when circumstances require and are firmly committed to transparency and honesty in our actions.


The Supreme Court of Justice of the European Union (CJEU) sentenced last December the Spanish banks to pay back all the money overcharged for the floor clauses, eliminating the non-retroactivity set by the Supreme Court (TS) in May 2013 and which limited the refund of what was charged in excess as of that same date. This ruling considers that limiting retroactivity is contrary to Community law, which in practice has meant recognizing the total retroactivity since the signing of the loan.

In recent days, the Government of Spain has decided to postpone a further week the royal decree law that articulates an extrajudicial system to return the money improperly collected by non-transparent floor clauses. This fact supposes to postpone the publication of the new mortgage law. In December, the Government has already decided to postpone the approval of a code of good practices to facilitate the return of the overcharged by the floor clauses.


How can we know if we are affected by the floor clause

– The first thing we must do is to search and carefully read the deed of our mortgage. It is usually recognized under headings with headings such as “limits on the application of variable interest”, “limit of variability” or “variable interest rate”. It is very important to also pay attention to the historical evolution of the mortgage rate. If since 2009 you haven’t noticed a noticeable decrease in your mortgage payment or it has remained fixed, it is very likely that it has a floor clause.

– It is very important that the ground clause is null. What the CJEU says is that if a Spanish court declares it null and void, it must be returned from the beginning and not from May 2013, as ruled by the TS court. Therefore, you must get a court to issue a judgment in your favor in order to claim the amounts.

– If you came to an agreement with the bank to remove the floor clause from your mortgages and resigned to take legal action in the future to claim more money you should know that some courts have also begun to declare these types of agreements null and void.

The extrajudicial system seeks to facilitate an agreement with the entities and establishes a maximum term of three months for their return. This procedure will be mandatory for the entity, but voluntary for consumers.

Thus, banks do not have the material means or “enough people” to process the repayment of amounts collected by non-transparent land clauses on mortgages in three months. The decree contemplates that clients can recover in cash the overcharged interest on the non-transparent floor clauses in their mortgages or opt to amortize the outstanding capital of the loan if they have not yet finished paying it.

What steps you have to take to complain

  • You have to try to negotiate with the bank in order to reach an agreement, if the bank does not eliminate the floor clause, the only option is to file a lawsuit.
  • You can claim the elimination of the floor clause before the Bank of Spain whose report, however, is not binding. The last option is the complaint.
  • In some cases, you can claim even if you have already finished paying the mortgage. That is, it is not always necessary that the debt with the bank be alive. Of course, it will be necessary to check in each case if the debt is four or fifteen years.

Get advice from an expert lawyer

Once you have identified yourself as harmed by the floor clause and to prevent the bank from re-taking advantage of the client, the most important thing is to have expert legal advice, which also examines any type of agreement with the bank and conscientiously analyze the feasibility of the claim.

At Ripoll & Mateu Solicitors Mallorca we advise, defend and represent our clients at all levels. Our greatest asset is an infrastructure of professional leaders in each field of action, as well as our international vocation and multilingual capacity.


The purchase of a house for rent offers in Spain an average return of 5.3%. Acquiring a property to rent it is each year a little more profitable. Compared to 5.4% in 2016, profitability in 2015 was 5.2%, in 2014 5% and 4.8% in 2013.Mallorca, offers a return of 5.4%, being one of the most profitable municipalities to buy a house and put it on rent.

One of the engines of the reactivation that is taking place in the real estate market is the appetite of the medium and big investors, who buy housing in ours in search of the high yields offered by the rent. This market is very strong in Spain and in a context of low interest rates and the absence of such high returns in financial markets, which explains why it is a safe bet.

The demand for flats under lease already exceeds the offer in Spain. All forecasts indicate that 2016 will close with price increases above 10% on average in this segment, compared to the previous year. Real estate specialists agree that a new bubble has begun to form in this market after seven years of stagnation and falling prices.

The rent today is already present in more than 20% of the country’s residential park, and its upward trend will not slow down during 2017. Mallorca is one of the areas leading the increase in prices.

The large cities of the Spanish geography show considerable increases in the price of rents, mainly for a common factor: given the strong demand, supply is still insufficient and this makes prices higher. There is a double speed in this market. In the big cities shoot up, although in medium-sized municipalities and in the smaller ones the prices slow down.

In terms of sales figures, second-hand housing in the Balearic Islands reached an average price in October of 2,183 euros per square meter, representing an increase of 0.52 per cent per month and 6.47 per cent year-on-year, the country’s most intense promotions, according to the monthly sales price report. For its part, the Balearic capital, Palma de Mallorca, ranked tenth in the national ranking of monthly increases, rebounding 0.55 percent. From one year to the next, it was the Spanish capital that increased its prices the most, showing a rise of 8.81 percent. Thus, with 2,145 euros per square meter in October 2016, Palma de Mallorca was the eighth most expensive provincial capital.

If you intend to purchase a property in Majorca from a foreign country like England or Germany, you should consider that both the jurisdiction and the processes to be carried out and the roles of professionals involved in it are different. Throughout the whole process, the presence of a lawyer is essential to be responsible for providing obligatory advice to clients on legal, tax and legal liabilities acquired during the action of sale.

Ripoll&Mateu can fully assist you in the buying process.



One of the curiosities of the real estate sector in the last years is being the increase of the demand of singular houses. Mallorca is one of the areas with the highest market for high-quality construction, presenting great prospects for the future.

This growth is being presented in Mallorca at a time of crisis in other sectors. Ibiza and Mallorca, show a very different behavior from the rest of Spain in this segment. What had traditionally been German and English demand, spent a few years on the Russian market and lately the Scandinavian market is entering with great force. Mallorca is a stable and safe area, with extraordinary connectivity with Europe through relatively short journeys.
In addition, it is a product that, although it can be developed in new soils, these last years is giving more and more in already built buildings undergoing integral reforms, and in extreme case to total demolitions to build a new house. Therefore, it is independent of the scarcity of land.

When an owner responsible as a house in Mallorca , is looking for a good team of professionals who accompany and advise in all aspects from the beginning to the end of the work. Professionals of architecture and construction who can shape and realize one idea, who can provide alternatives that improve the perspectives, analyze the technical, urban and economic feasibility of this idea.

Regardless of whether the new owner acquires a plot for building or an old property to reform, it is essential the figure of a lawyer who offers comprehensive service in everything required for the purchase of a property. It is therefore necessary to have the services of a firm of lawyers specialising in real estate law with multilingual abilities to offer totally reliable and understandable advice to the customer.

  • Advice and assistance will be given to obtain a Spanish ID no (called a NIE).
  • Negotiate, amend and finalise the terms and conditions of the purchase contract
  • Conduct a land registry search to ascertain the official owner, the description of the property; whether the building is registered and whether there are any charges attached to the property, such as a mortgage, easements or positive/negative covenants.
  • Search at the local council planning department to discover whether the building itself has a building license/permit.
  • Search at the cadastral registry to confirm the cadastral value.
  • Completion of the transaction before a Notary Public. A notary public is a Spanish Public Servant who certifies the capacity of the parties and the content of the title-deed.
  • After signing and the completion of the deal, Property Transfer Tax (ITP, currently a progressive tax from 8 to 10%) has to be paid to the Balearic Islands Tax Authorities within 30 days of completion, in accordance with a general tax rule.
  • Formally notify the utility companies (electricity, water, etc) of the change of ownership and organise payment arrangements with your Spanish bank.

We specialise in Real Estate Law and legal and tax advice in the process of buying and selling a property in Mallorca.




As we have said on numerous occasions, acquiring a property in Mallorca is a very different process from other foreign countries and requires information and professional advice that facilitates the purchase while minimizing the risks.

Among other procedures, we strongly recommend carrying out construction surveys previous to the closing of the purchase sales process. These, come in a variety of forms according to the type of property that you are buying.

Reasons to perform building surveys previous to the buy of a property

  • The building survey will help you to have knowledge about the the property structural conditions.
  • This process allows youto be aware ofany problemsbefore buying ahome and know the location of boundary lines and other lines of occupancy or possession.
  • The survey will certify that the buildings and other improvements, alterations, and repairs to your property that exist at the time of the survey are not in violation of laws.
  • The survey will report your zoning jurisdiction and classification.
  • This knowledge will help you to begin a process of negotiation.

Main types of survey

  • Condition Report: This is the most basic survey you can get, it is designed to complement the mortgage valuation and just provides light indications as to the state of various parts of the property.
  • Home Buyers Report: this is suitable if you are going to buy a property that is in a reasonably good condition but generates some doubts. It will tell you any obvious major problems, and includes a valuation and an insurance reinstatement value. It also breaches of building regulations set by local councils of different localities of the island.
  • Buildings Surveys: This options is valuable if you are looking at a very old, unusual, listed, timber framed, or thatched property. It is also good to have a full building survey done if you want to do some serious building works and includes advice on repairs. It provides estimated timings and costs, and will tell you what will happen if you do not do the repairs.

If you are in the process of purchase a property in Mallorca , it’s advisable to appoint an independent surveyor working exclusively for you as a buyer. The cost and type of the survey depends on the size, condition and age of the property.

We have an in-depth knowledge of the General Urban Plan and the Spatial Plan of Mallorca, and have the best professionals in the field for the island to assist in construction matters and legalisation of constructions in Mallorca.

In Ripoll & Mateu we work to get total satisfaction of our customers effectively by offering legal services and personalized assistance. Real Estate Law, conveyancing, urban planning and foreign investments in Mallorca are our specialties.







This is a question that many people ask, how to pass a property before death and the donation is usually an option to consider. While it should be noted that in Spain the number of inherited housing is much greater than donations, according to the National Statistics Institute. The main factor that tips the balance is the fiscal cost, which is different in each region.

Taxation is another important point to consider. In some regions (with jurisdiction over the inheritance and gift tax) gifts tend to be more burdensome for the purposes of inheritance taxation. These include bonuses, rebates and regional tax credits. In contrast, the donation are only some of these tax advantages. The beneficiary of the donation is who will have to pay, as in the case of inheritance, although with harder conditions. In addition, the donor must pay the income tax for the donation, since it is considered a lucrative transmission that can produce capital gains or losses.

In the case of acquisition of residence by inheritance, state law provides for a 95% reduction in the tax base on which the tax is calculated, up to a maximum amount of 122,606 euros. The Autonomous Communities may, in turn, increase this percentage, modify the limit and apply bonuses to the fee payable out. In the case of donations of residence, state law does not provide specific reductions, each region sets its rules. Are applied reductions in the tax base when it comes to regular housing or money is donated to the sons to buy their first home.


Each region has its own rules regarding inheritance and gift although in general, donations are “more burdensome for the purposes of taxation” that inheritances. The fact that donations prove generally more expensive than inheritances is that many regions do not include any bonus for this legal form, or submit its application only to certain situations and to certain amounts. In the case of the Balearic Islands, there is a reduction of 100% of the value of inherited property, with the limit of 180,000 euros per taxpayer. In the case of a donated house there is also reduction for children under 36 years old and with less equity to 400,000 euros: the reduction is 57% of the property value provided it does not exceed 180,000 euros and doesn’t have an area of over 120 m2.

Contact us if you need advice about this issue, our team offers judicial and extrajudicial representation and advice on matters relating to movable and/or immovable property, as well as specific areas of civil law as real estate law, family and inheritance law.


Balearics is the Spanish community in which has more increased the price of housing compared to 2015, an increase of almost 10% when the rest of communities the increase does not reach 2.5%. In the whole of Spain, the average price of private housing increased by 2.4% in the first quarter to stand at 1492.4 euros per square meter, stringing four consecutive quarters with annual growth, as reflected in the statistics recently published by the Ministry of Public Works.

The price of private housing has also increased by 0.2% per square meter in reference to the last quarter of 2015. Since the minimum value reached in the third quarter of 2014 the price of housing has rebounded 2.5%. This new increase comes after the average price of private housing to go up 2.1% last year. It has experienced in the first quarter year on year growth of 3.1% after adding six consecutive quarters of increases.   In the classification by autonomous communities that present year growth of price, are the Balearic Islands (9.6%); Catalonia (4.9%); Madrid (4,2%); Extremadura (3.7%); Galicia (2.6%); Valencia (2.4%) and Canarias (2.4%). Free housing for up to five years old has increased in the first quarter by 0.2% to 1,727.8 euros, while those of more than five years have grown 1486.4 euros per square meter, representing a rise 2.6% annual rate. On the other hand, the average price of subsidized housing registered an increase of 1.5% to 1,113.2 euros / m2. The number of property valuations used for the calculation of housing prices in the first quarter of 2016 was 110,133, representing a 13.9% increase over the same quarter last year.

If you intend to purchase a property in Majorca from a foreign country, Ripoll & Mateu Solicitors Mallorca can fully assist you in the buying process. We offer our clients a comprehensive service in everything required for the purchase of a property. Feel free to contact us, we specialise in Real Estate Law and legal and tax advice in the process of buying and selling a property in Mallorca.


Groups that are part of the Parliament of the Balearic Islands have supported past week the initiative of Partido Popular concerning the rental accommodation in the Islands, this is based on three aspects:

  • The Parliament urges the Balearic Islands Government to submit this initiative to the camera for study, discussion and adoption of a draft law regulating the different types of tourist stay in the Balearic Islands.
  • The Parliament urges the Government to reach a consensus on this bill with all sectors concerned and especially with marketing holiday rentals online companies.
  • The third point concerning the removal of the bill tax tourist stays in the Balearic Islands and measures to promote sustainable tourism to the regulation of rental holiday housing, finally it has not been tested for lack of consensus among the different parties.
    The parties supporting executive management have refused to do so, because the intention is that the new tax begins to be charged this year.

Over the past year, the regularization of holiday homes was lower than the previous year due to the rise of this activity outside the current rules. That is why has intensified inspections in such housing. The owners who want to rent their homes to tourists should make a statement accountable to the Ministry of Tourism, as recorded by the Tourism Act of 2012.

If you have a property in Mallorca and you want to rent it during holiday periods please contact Ripoll & Mateu Solicitors Mallorca, we will advise and accompany you during the process of legalizing your home for holiday rental and will offer you updates and standards about this.


Last October, the Balearic Islands Government announced a general tax increase, which has been materialized with the arrival of the new year in the budgets of the CAIB.

This represent an increase of 65% in revenues from Inheritance and Donations Tax, 45% Tax Heritage and 18.16% for Property Transfer Tax. At be repealed regional deduction which determines the maximum tax of 1% on the tax base, taxpayers duties in Baleares, groups I and II (spouse, parents and descendants ….) Will be increased during the year 2016, taxation of this tax from the € 700,000 per taxpayer.

Although the effect of certain tax benefits that affect both inheritance taxation as corresponding to donations, especially of the aforementioned groups is maintained. At the time of calculating the cost of the tax benefits there are two groups:

– For Groups I and II benefits. In each group there are, on the one hand, tax benefits affecting reductions and, on the other, those who pose a deduction in the amount of the tax, among which the deduction of the fee for group II (children, descendants and spouses), which in practice means limiting the taxation of inheritances to 1% and 7% donations for these families. Although the taxation of inheritance is modified when the estate exceeds the amount of 700,000 euros, the reduced tax rate of 1% is maintained, and also regarding the tax base for inheritance do not exceed this limit.

– For the groups III and IV benefits. Several tax benefits are included, as reduced by transfer of an undertaking, the reduction transmission residence and bonuses on sales of goods in exchange for food.

Progressive table of inheritance tax for people between group I and II (children, parents, spouses):

Taxable income from (€) Gross tax (€) Rest tax base up (€) Applicable type
0 0 700.000 1%
700.000 7.000 300.000 8%
1.000.000 31.000 1.000.000 11%
2.000.000 141.000 1.000.000 15%
3.000.000 291.000 And more

As the Wealth Tax is concerned, the minimum exempt from 800,000 down to 700,000 euros, increasing the fee based on the table that we show below:

Taxable income from (€) Gross tax (€) Rest tax base up (€) Applicable type
0,00 €
0 €
170.472,04 € 0,28
170.472,04 €    477,32 €
170.465,00 €
340.937,04 €
1.176,23 €
340.932,71 € 0,69
681.869,75 € 3.528,67 € 654.869,76 € 1,24
1.336.739,51 € 11.649,06 € 1.390.739,49 € 1,79
2.727.479,00 € 36.543,30 € 2.727.479 € 2,35
5.454.958,00 €
100.639,06 €
5.454.957,99 €
10.909.915,99 €
258.832,84 €
And more 3,45

Finally, in reference to the Capital Transfers and Documented Legal Acts Tax, a new applicable rate is established from the time when the value of the property exceeds 1,000,000 euros, then taxed at 11%.

If you need more information or advice on the recent changes in the tax, please contact Ripoll Mateu Solicitors Mallorca. We are at your disposal through our new website  or at our offices in Palma and Pollença.