Before you start

NIE
A determination of whether you are tax resident for the year
Records of worldwide income and foreign assets
A certificado digital or Cl@ve credentials for the Agencia Tributaria

Step-by-step

1
Work out whether you are tax resident, and from when
More than 183 days in a calendar year makes you resident, as does having your centre of economic interests in Spain. Residency is assessed for the whole calendar year rather than pro-rated from arrival, which produces surprising results for anyone moving mid-year with significant income already earned abroad.
OnlineWho: You
2
Understand that half your income tax is Balearic
IRPF combines a state scale with an autonomous community scale, and the Illes Balears set their own. The same gross salary produces a different net in Palma, Alicante and Málaga — and different again in Bilbao, which runs an entirely separate foral system. Any comparison quoting a single national figure is wrong at higher incomes.
OnlineWho: You
3
Check where you actually sit against the wealth tax threshold
The Balearics apply wealth tax with no general rebate but with a regional exempt minimum of 3,000,000 euros, well above the 700,000 national default, plus an enhanced allowance for a main home. Above that level the state's temporary solidarity levy on large fortunes also bites, with credit for regional tax paid. Confirm the current figures with the Agència Tributària de les Illes Balears — this region has changed them.
OnlineWho: You
4
Budget the transfer tax before you budget the purchase
The Balearic property transfer tax runs on a progressive scale from 8% rising to 13% on the highest-value acquisitions — the steepest in Spain. There is a full exemption for a first habitual home bought by a young buyer under a price ceiling, but it conditions on habitual residence in the Balearics for the years before the purchase, which excludes a newly arrived buyer. Verify the current bands before making an offer.
In personWho: You
5
File the Modelo 720 if you hold foreign assets
Tax residents must report overseas accounts, securities and property above a threshold in each of three categories, with a separate Modelo 721 for cryptoassets held abroad. These are information returns rather than taxes, with their own deadline, and they catch a very high share of arrivals here because so many keep property elsewhere.
OnlineWho: You
6
File the annual Renta between April and June
The declaration for the previous calendar year is filed in the spring window. The Agencia Tributaria pre-fills a draft — the borrador — which is usually right for a simple Spanish salary and materially wrong for anyone with foreign income, a foreign pension, rental income or a holiday-letting business. Do not confirm it unchanged.
OnlineWho: YouApril–June annually

Documents you’ll need

NIE
Certificado digital or Cl@ve credentials
Employment income certificates from Spanish employers
Records of all worldwide income and foreign accounts
Documentation of foreign property, pensions and securities for the Modelo 720

Things most newcomers don’t know

The Balearics have the highest wealth tax floor in Spain, which is the opposite of what people assume.

Andalusia and Madrid rebate wealth tax entirely; the Comunitat Valenciana charges it above one million euros; the Balearics charge it but only above three million, plus a larger main-home allowance. The design is deliberate — the state solidarity levy on large fortunes bites at roughly the same level, so keeping a regional tax alive there retains the revenue locally instead of surrendering it to the state. For most residents the practical result is a wealth tax bill of nothing, in the region everybody assumes is punitive.

Source: Agència Tributària de les Illes Balears

The expensive tax here is on buying, not on owning.

Balearic property transfer tax is the steepest progressive scale in Spain, running through several bands from 8% to 13% on the highest-value purchases, and it is paid in cash on completion on top of the price. On an expensive property that is a very large number. The relief that exists — a full exemption for a young first-time buyer under a price ceiling — requires several years of prior habitual residence in the islands, so it is structurally unavailable to someone who has just moved here.

Source: Agència Tributària de les Illes Balears

The much-reported restrictions on foreign buyers are proposals, not law — with one old exception that is real.

A proposal to let pressured municipalities restrict purchases by non-residents was voted down in the Balearic parliament in February 2026, and the state's proposed surcharge on non-EU non-resident buyers of second-hand homes remains a bill. Neither is in force. What is in force, and predates all of it, is Ley 8/1975: the Balearic Islands are a restricted-access zone, so a non-EU or non-EEA buyer of rustic, non-developable land needs Ministry of Defence authorisation. Urban property is unaffected. If you are buying a finca, that authorisation is the real item on the checklist.

Source: Parlament de les Illes Balears

Holiday-letting income is taxed and licensed as two separate things, and people conflate them.

Even where a property holds a valid tourist licence, the income is taxable in Spain and reportable on the Renta, with different treatment for a resident and a non-resident owner and no automatic deduction for periods of personal use. Conversely, paying tax on the income does not legalise an unlicensed let — the Balearic penalty regime for unlicensed tourist letting runs into the hundreds of thousands of euros. Get the licence question and the tax question answered separately.

Source: Agencia Tributaria

Common mistakes to avoid

Assuming the Balearics tax wealth harshly — the exempt minimum is the highest in Spain.
Budgeting a purchase without the 8–13% transfer tax, or assuming the young-buyer relief applies to a newcomer.
Believing that non-residents are barred from buying property here, which they are not.
Buying rustic land as a non-EU national without the Ley 8/1975 military authorisation.
Confirming the borrador unchanged when you have foreign income or letting income.

Some of this may be out of date. Spotted something inaccurate? Help us keep it right for the next newcomer.

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