Wealth tax Balearic Islands: How much does a buyer of a €4,870,000 villa in Mallorca pay?
Wealth tax in Mallorca: on the Balearic Islands €3m per person stays tax-free. This model runs a villa at €4,870,000 over 20 years: cash purchase, mortgage, mortgage with Lombard loan. All figures are open in the tables. It is a model calculation, not tax advice.
How much is the Mallorca wealth tax for a buyer of a €4,870,000 villa?
On a villa at €4,870,000 bought without a loan, the model gives wealth tax of €21,194 a year on Mallorca, after the €3m allowance per person. Above the allowance the rate rises from 0.28% to 3.45%. With a mortgage and a Lombard loan it is €0 in all 20 years. The model is a calculation, not tax advice.
What is inside:
- Model · villa at €4,870,000, mortgage and Lombard loan
- Scale · Balearic Islands 2026, allowance €3m per person
- Result · tax year by year over 20 years
- Risks · what can break the calculation
Open the PDF directly — no form · Wealth tax Mallorca, model calculation (PDF)
Model calculation without guarantee, no offer and no tax advice.
The model: villa on Mallorca for €4,870,000
A resale villa, a buyer without residence in Spain, sole ownership
The value of the villa stays the same in the calculation over 20 years. The figures are taken at 31 December of each year. Purchase costs follow the Balearic rates, as in our purchase-cost calculator.
Purchase price of the villa — Amount: €4,870,000; Note: Resale villa on Mallorca. Transfer tax (ITP), tiered — Amount: €583,100; Note: 8% up to €400,000, 13% from €2m. Notary, land registry, gestoría, lawyer, valuation — Amount: €97,400; Note: Guide value 2% of the price.
Total requirement — Amount: €5,550,500; Note: Purchase price and costs. Mortgage with a Spanish bank (70% of the price) — Amount: €3,409,000; Note: 2.55% interest, repaid over 20 years, payment €18,148 a month.
Lombard loan (rest of the requirement) — Amount: €2,141,500; Note: 3.15% variable, interest only, €5,621 a month, secured by your securities portfolio. Equity from savings — Amount: €0; Note: Purchase price and costs are fully financed.
How high is wealth tax on the Balearic Islands?
The taxable base is net wealth in Spain, i.e. the value of the property minus deductible debts. €3,000,000 per person is deducted, and this scale applies to the rest (Balearic Islands 2026, marginal rates).
€0 to €170,472 — Rate on this band: 0.28%. €170,472 to €340,937 — Rate on this band: 0.41%. €340,937 to €681,870 — Rate on this band: 0.69%. €681,870 to €1,336,740 — Rate on this band: 1.24%.
€1,336,740 to €2,727,479 — Rate on this band: 1.79%. €2,727,479 to €5,454,958 — Rate on this band: 2.35%. €5,454,958 to €10,909,916 — Rate on this band: 2.90%. over €10,909,916 — Rate on this band: 3.45%.
Cash purchase: net wealth €4,870,000 minus €3,000,000 allowance leaves €1,870,000 taxable. That gives €21,194 a year. By law the allowance also applies to non-residents on the Balearic Islands; how the return has to be filed is something to clear with the tax adviser on site.
Cash, mortgage or mortgage with Lombard loan: what do you pay in 20 years?
In the model a buyer without a loan pays €21,194 a year and €423,888 over 20 years. With a mortgage and a Lombard loan it is €0 in all 20 years. The tax is calculated each year at 31 December.
A · Cash purchase from equity — Tax per year: €21,194; Tax over 20 years: €423,888. B · Mortgage of €3,409,000 alone — Tax per year: €0 until year 10, then rising; Tax over 20 years: €83,022. C · Mortgage and Lombard loan — Tax per year: €0; Tax over 20 years: €0.
Tax saved by the mortgage (A minus B) — Amount: €340,866. Tax additionally saved by the Lombard loan (B minus C) — Amount: €83,022. Total tax saved (A minus C) — Amount: €423,888. Return advantage at 4% portfolio return and 3.15% loan rate (assumption) — Amount: €364,055.
Return advantage: the portfolio stays invested. The spread of 0.85% on €2,141,500 over 20 years is used, without compound interest. The 4% is an assumption, not a forecast.
The tax year by year: The table shows the remaining mortgage and the tax of the three routes for every year.
1 — Remaining mortgage: €3,276,619; A · Cash: €21,194; B · Mortgage only: €0; C · Mortgage and Lombard loan: €0. 2 — Remaining mortgage: €3,140,822; A · Cash: €21,194; B · Mortgage only: €0; C · Mortgage and Lombard loan: €0.
3 — Remaining mortgage: €3,001,522; A · Cash: €21,194; B · Mortgage only: €0; C · Mortgage and Lombard loan: €0. 4 — Remaining mortgage: €2,858,628; A · Cash: €21,194; B · Mortgage only: €0; C · Mortgage and Lombard loan: €0.
5 — Remaining mortgage: €2,712,047; A · Cash: €21,194; B · Mortgage only: €0; C · Mortgage and Lombard loan: €0. 6 — Remaining mortgage: €2,561,685; A · Cash: €21,194; B · Mortgage only: €0; C · Mortgage and Lombard loan: €0.
7 — Remaining mortgage: €2,407,443; A · Cash: €21,194; B · Mortgage only: €0; C · Mortgage and Lombard loan: €0. 8 — Remaining mortgage: €2,249,221; A · Cash: €21,194; B · Mortgage only: €0; C · Mortgage and Lombard loan: €0.
9 — Remaining mortgage: €2,086,918; A · Cash: €21,194; B · Mortgage only: €0; C · Mortgage and Lombard loan: €0. 10 — Remaining mortgage: €1,920,427; A · Cash: €21,194; B · Mortgage only: €0; C · Mortgage and Lombard loan: €0.
11 — Remaining mortgage: €1,749,640; A · Cash: €21,194; B · Mortgage only: €337; C · Mortgage and Lombard loan: €0. 12 — Remaining mortgage: €1,574,448; A · Cash: €21,194; B · Mortgage only: €990; C · Mortgage and Lombard loan: €0.
13 — Remaining mortgage: €1,394,735; A · Cash: €21,194; B · Mortgage only: €2,103; C · Mortgage and Lombard loan: €0. 14 — Remaining mortgage: €1,210,385; A · Cash: €21,194; B · Mortgage only: €3,375; C · Mortgage and Lombard loan: €0.
15 — Remaining mortgage: €1,021,280; A · Cash: €21,194; B · Mortgage only: €5,598; C · Mortgage and Lombard loan: €0. 16 — Remaining mortgage: €827,295; A · Cash: €21,194; B · Mortgage only: €8,003; C · Mortgage and Lombard loan: €0.
17 — Remaining mortgage: €628,305; A · Cash: €21,194; B · Mortgage only: €10,470; C · Mortgage and Lombard loan: €0. 18 — Remaining mortgage: €424,182; A · Cash: €21,194; B · Mortgage only: €13,602; C · Mortgage and Lombard loan: €0.
19 — Remaining mortgage: €214,792; A · Cash: €21,194; B · Mortgage only: €17,350; C · Mortgage and Lombard loan: €0. 20 — Remaining mortgage: €0; A · Cash: €21,194; B · Mortgage only: €21,194; C · Mortgage and Lombard loan: €0.
Total — A · Cash: €423,888; B · Mortgage only: €83,022; C · Mortgage and Lombard loan: €0.
Why a Lombard loan on top?
The mortgage is repaid every year, and with the remaining balance the deduction from net wealth shrinks.
From year 11 net wealth in the model is above €3,000,000 and the tax starts. The Lombard loan is not repaid and keeps the debts high, so net wealth stays below the allowance in all 20 years. At the same time the portfolio stays invested because you do not have to sell it.
What does the structure cost, and what is the risk?
The mortgage costs €18,148 a month, together with the Lombard interest it is €23,769 a month. The interest on the mortgage comes to €946,410 over 20 years. After 20 years the Lombard loan keeps running and is still €2,141,500.
- The risk: The interest rate of the Lombard loan is variable and can rise. If the value of the portfolio falls, the bank can call for more collateral or sell securities. The return advantage is not certain.
- What has to hold for the calculation to work? The model shows a calculation, not a promise. Five points decide whether it holds in your case.
- Use of the debt: A debt is deductible if it was taken out to buy or renovate the property (Tribunal Supremo, judgment 167/2023).
If the tax authority does not accept the debt for the purchase costs, the model shows €2,221 of tax in years 19 and 20. Your tax status: Residence, wealth and ownership decide.
For couples each holding half in the land register the allowance applies per person. The portfolio: A Lombard loan needs a securities portfolio that the bank accepts as collateral. The lending ratio depends on the securities.
The bank: A mortgage of up to 70% of the price for non-residents is the usual case, not a commitment. The bank decides on credit standing and property.
The tax adviser on site: This structure is not a standard product and belongs with a tax adviser before the purchase.
The model calculation as a PDF: All tables, the scale and the assumptions on three pages. Free, by email, no upfront costs.
Frequently asked questions
Do non-residents pay wealth tax on Mallorca?
Yes, on net wealth in Spain. On the Balearic Islands an allowance of €3m per person applies, above it a scale from 0.28% to 3.45%. How the return has to be filed is something to clear with the tax adviser on site.
What is the allowance for couples on Mallorca?
It is €3m per person, so €6m together for couples who each hold half in the land register. The model does not use this, one person buys alone.
Does a mortgage reduce wealth tax on Mallorca?
Yes, the debt is deducted from the value of the property if it was taken out to buy or renovate it (Tribunal Supremo, judgment 167/2023). In the model the mortgage alone saves €340,866 of tax over 20 years.
What does the Lombard loan add?
It is not repaid and keeps the debts high. In the model it saves a further €83,022 of tax because net wealth stays below the €3m allowance after year 10 as well.
What is the risk of a Lombard loan?
The interest rate is variable and can rise. If the portfolio loses value, the bank can call for more collateral or sell securities. The return advantage in the model is also only an assumption.
How much equity does the buyer need in the model?
From savings €0: the purchase price and costs of €5,550,500 are covered by the mortgage and the Lombard loan. The collateral is the villa and the securities portfolio.
Is the model tax advice?
No, it is a model calculation with open assumptions. Whether the structure applies to you depends on residence, wealth and proof of use, and belongs with a tax adviser on site before the purchase.
Buying on Mallorca? We run the numbers with your figures.
Send us the property, the price and the position of your securities portfolio. We tell you whether the structure holds before you sign. The tax question then belongs with your tax adviser on site.
Related pages
Lombard loan: how do you finance a property in Spain with it?
Lombard loan: securities portfolio as collateral, rate Euribor plus margin, from €500,000. How it works on a property purchase in Spain, and what the risks are.
Wealth tax in Spain for non-residents: which allowances and rates apply?
Wealth tax in Spain 2026 for non-residents: Balearic Islands (Mallorca, Ibiza) up to €3m, Andalusia effectively 0% — allowances, rates and the mortgage effect.
Buy property on Mallorca: what does the bank lend and what tax is due?
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Equity release in Spain: how much paid-off property does your next purchase need?
Equity release in Spain and Portugal: ten model calculations — full purchase price financed, own funds needed only for the costs.
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The cost of buying property in Spain: what comes on top of the price?
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Mortgage rates Spain: what do fixed, variable and mixed cost right now?
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Content by Siegfried Perini — local brand representative since 2019, active in real estate since 1992, entered in the German intermediary register (§ 11a GewO) as a person directly involved in brokerage and advice. Point of contact for German-speaking buyers in Spain and Portugal. Brokerage by Olga Nikushkina, mortgage credit intermediary under § 34i German Trade Regulation (GewO); in Portugal through a locally licensed intermediary.