Who pays in the Balearics
| Taxpayer | Assets taxed | Main reliefs |
|---|---|---|
| Resident in the Balearics | Worldwide assets | Exempt amount, main home up to 300,000 euros, combined limit with income tax |
| Non-resident owning Balearic property | Spanish assets only | Exempt amount under the applicable regional rules; no main-home relief |
How property is valued
Real estate is valued at the highest of three figures: the cadastral value, the value established by the tax administration for other taxes, or the acquisition price. For older purchases the cadastral value often applies; for recent ones, the price. Mortgages that financed the property are deducted.
Balearic exempt amount and scale
The Balearic Islands have adjusted their exempt amount and rates several times. Because the figures change, we apply the rules in force for each year rather than general estimates. Non-residents can generally apply the rules of the region where most of their Spanish assets are, which for owners in the islands means the Balearic rules.
Planning ideas
- Split ownership between spouses so that each uses an exempt amount.
- Consider financing structure, as debts linked to the property are deductible.
- Residents should check the combined limit with income tax.
- Family business assets may be exempt under conditions.
The solidarity tax
Above 3 million euros of net wealth, the national solidarity tax may also apply, with a credit for regional wealth tax paid. See the solidarity tax and our wealth tax service.
An illustrative example
Based on situations we commonly see; not a specific client. A British owner held a villa in Ibiza in his sole name, valued for wealth tax at 3.4 million euros, with a mortgage of 600,000. We calculated the Balearic wealth tax and the solidarity tax, and advised on the effects of transferring a share to his wife before the next 31 December.
How Castell.tax can help
We calculate wealth tax and the solidarity tax for residents and non-resident owners, prepare the modelo 720 and model the effect of ownership, debt and residence decisions before 31 December, when planning still works. See our wealth tax service or contact us for an assessment of your position in English or German.
This page is published by Castell.tax, the tax practice of Castell.law in Palma de Mallorca. It is general information; tax rules and rates change, so check your case with us before filing.
Not sure what you owe? Ask before the deadline
Send us your situation or the letter you received. A tax adviser will tell you what applies, what it could cost and what to file.
Frequently asked questions
Do non-residents pay Balearic wealth tax?
They pay Spanish wealth tax on Spanish assets, generally under the Balearic rules if their assets are there.
Can I deduct my mortgage?
Yes, debts that financed the taxed property are deductible.
Is the main home exempt for non-residents?
No, the 300,000-euro exemption is only for residents' main homes.
When is wealth tax filed?
Usually with the income tax campaign, from April to June.