Spanish Tax for Foreigners in Mallorca: 2026 Guide
Spanish tax for foreigners in Mallorca hinges on one question: do you spend more than 183 days a year in Spain? If you do, you pay income tax (IRPF) on your worldwide income, with a Balearic regional rate of 9% to 24.75% in 2026 on top of the state scale. If not, you generally pay 19% (EU/EEA) or 24% non-resident tax. Residents only pay wealth tax above €3,000,000 since 2024, and children inherit with a 100% bonus.
Every year Mallorca attracts German, British, Scandinavian and other families from all over the world who decide to settle here. And almost all of them arrive with the same doubt: what taxes am I going to pay? The answer has a lot of small print, but also good news. For those who plan well, the Balearic Islands are one of the friendliest regions in Spain. Let’s clarify it without impossible technicalities.
How does Spanish tax for foreigners in Mallorca work?
It depends on your tax residence. You are a tax resident in Spain if you spend more than 183 days a year in the country or if the main centre of your economic interests is here; if your spouse and minor children live in Spain, residence is presumed unless you prove otherwise. Residents pay on worldwide income, while non-residents only pay on what they earn in Spain.
And this matters a lot, because a tax resident is taxed on everything they earn, wherever it comes from, through IRPF. Non-residents, on the other hand, pay Non-Resident Income Tax (IRNR), generally at 19% if they live in the EU or the EEA and 24% in other cases. The difference is huge, and the Tax Agency explains it in its section on non-residents. Spain does not split the tax year either: you are resident or non-resident for the whole calendar year. Everything else about Spanish tax for foreigners in Mallorca hangs on this point, so knowing which side you are on, and planning the change if you move mid-year, is the first thing I check as a financial advisor in Mallorca.
Is Mallorca a tax haven?
No. Mallorca applies the full Spanish tax system: residents pay income tax on their worldwide income, and the Balearic regional scale runs from 9% to 24.75%, so the top combined rate reaches 49.25% in 2026. What the Balearic Islands do offer are targeted reliefs: no wealth tax for residents below €3,000,000 since 2024 and a 100% bonus on inheritances between parents, children and spouses.
| Tax | Who pays it | Key figure in the Balearic Islands (2026) |
|---|---|---|
| Income tax (IRPF) | Tax residents, on worldwide income | Regional rate 9%–24.75%; top combined rate 49.25% |
| Savings income (interest, dividends, gains) | Tax residents | 19%–30% |
| Non-resident income tax (IRNR) | Non-residents, on Spanish income | 19% for EU/EEA residents, 24% for the rest |
| Wealth tax | Residents above the exemption | Exempt up to €3,000,000; 0.28%–3.45% above |
| Inheritance tax | Heirs | 100% bonus for spouses, children and parents |
| Gift tax | People receiving a gift | 100% deduction for spouses, children and parents since 25 July 2025 |
The “Mallorca tax haven” idea comes from mistaking two real advantages for the whole picture. Income is taxed as anywhere else in Spain: the Balearic tax code sets a regional scale from 9% on the first €10,000 to 24.75% above €175,000, which is added to a state scale running from 9.5% to 24.5%. With €100,000 of taxable income, every extra euro already pays 45.25%.
Wealth tax is where the islands genuinely stand out. Since 1 January 2024, residents only pay it on net wealth above €3,000,000, compared with €700,000 under the state rule, plus up to €300,000 for the main home. Above that, the regional rate runs from 0.28% to 3.45%, and the state solidarity tax on large fortunes may also apply, although what you pay in wealth tax is deducted from it. Non-residents start from the state exemption of €700,000, as the €3,000,000 one is reserved for Balearic residents; even so, if their most valuable Spanish assets are in the Balearic Islands, they can opt for the Balearic rules by ticking a box in the return. We explain the calculation step by step in our guide to wealth tax in Mallorca.
So no, it is not a haven. The honest summary of Spanish tax for foreigners in Mallorca is that planning ahead pays off, and inheritance is the clearest example.
Why does residing in Mallorca have tax advantages?
The great advantage of living in Mallorca lies in Inheritance and Gift Tax. Since 18 July 2023, the Balearic Islands apply a 100% bonus on inheritances between spouses, ascendants and descendants (groups I and II), and since 25 July 2025 the same relatives enjoy a 100% deduction on gifts. When a child inherits from their parents, in practice they pay nothing in Spain.
This makes the Balearic Islands very competitive compared with other European countries, where inheriting can cost a high percentage of the estate. A foreign family that moves its residence and wealth here can pass it on to the next generation at a minimal tax cost. This refers to Spanish tax: heirs who live in another country may also owe inheritance tax there, as happens in Germany. The bonus does not remove the obligation to file the return, though. The tax is managed by the Agència Tributària de les Illes Balears (ATIB), and it is one of the reasons why so many international families choose the island. I work on it in depth within the estate planning in Mallorca that I offer to resident and newcomer families.
What is the impatriate regime or Beckham law and who is it good for?
The impatriate regime, known as the Beckham law, lets people who become Spanish tax residents because they move here for work be taxed under non-resident rules for the year of the move and the following five years. In practice, it means a flat 24% on employment income up to €600,000, and 47% above that, instead of the progressive IRPF scale, which in the Balearic Islands reaches 49.25%.
Who is it for? Mainly high earners and managers who move to Mallorca for a new job, people working remotely for a foreign company and certain entrepreneurs, provided they have not been resident in Spain in the previous five years. It is regulated in article 93 of the Spanish Income Tax Act. It is not automatic: you have to opt in with form 149 within six months of starting your activity, and leaving it later means renouncing in November or December for the following year. Retirees cannot use it on their own, because it requires moving here for work or business. And for medium incomes, the normal IRPF scale can be better. That is why it pays to run the numbers first, which is just the kind of analysis I do with expatriate families in Mallorca.
How are inheritances and gifts of foreigners taxed in the Balearic Islands?
Foreigners who inherit or receive gifts in the Balearic Islands get the same reliefs as Spanish nationals. And since July 2021, Spanish law lets every non-resident heir, from the EU or not, apply the Balearic rules instead of the state ones whenever the deceased lived in the Balearic Islands or, if the deceased lived outside Spain, most of the Spanish estate is located here.
| Relationship | Inheritance tax | Gift tax |
|---|---|---|
| Spouse, children, grandchildren, parents (groups I and II) | 100% bonus | 100% deduction since 25 July 2025 |
| Siblings, nephews, nieces, uncles and aunts by blood (group III) | 60% bonus, or 35% if they inherit alongside the deceased’s descendants | 60% deduction |
| Other group III relatives, such as in-laws | 35% bonus | 35% deduction |
A key nuance: an heir who does not live in Spain is no longer excluded from these advantages. The change started with a 2014 ruling of the Court of Justice of the EU and was extended to all non-residents by a 2021 amendment to Spain’s inheritance tax law. This is decisive for international families with assets in Mallorca and heirs spread across Europe, the UK or the US. Conditions apply: property must be declared at no more than its reference value plus 20%, and cash gifts need a notarial deed showing where the money comes from. Planning the transfer in time, and by the right route, inheritance or gift, can save a lot of money, as we explain in how to leave your estate to your children in Mallorca.
What are the tax obligations of a resident alien with assets abroad?
A tax resident in Spain with assets abroad must report them when they exceed certain thresholds. The best-known obligation is form 720, the return on assets and rights held abroad: it is mandatory when bank accounts, securities and insurance, or real estate outside Spain exceed €50,000 in any of the three categories, and it is filed between 1 January and 31 March.
Failing to file can lead to penalties, so transparency is non-negotiable. This is not a new tax: it is an information obligation, and once filed you only file again when a category has grown by more than €20,000 or you stop owning an asset you declared. Even so, it scares many newcomers who keep accounts and properties in their home country. The Tax Agency’s page on form 720 has the details. The good news is that, well planned, living in Mallorca and holding assets abroad are perfectly compatible. The key is to meet the deadlines and to structure your wealth with criteria, something I coordinate with your tax advisor within the wealth management for foreigners in Mallorca.
FAQ — Spanish tax for foreigners in Mallorca
How many days do I have to be in Mallorca to be a tax resident in Spain?
A person is a tax resident in Spain if they spend more than 183 days a year in Spanish territory. They are also resident if the centre of their economic interests is in Spain, and residence is presumed if their spouse and minor children live here, even when those days are not exceeded. The 183 days do not have to be consecutive: they are counted across the calendar year, including sporadic absences, unless they prove tax residence in another country.
What is the income tax in Mallorca for a resident foreigner?
Resident foreigners pay the same income tax in Mallorca as Spaniards: a state scale plus the Balearic one. In 2026 the Balearic part runs from 9% on the first €10,000 to 24.75% above €175,000, and the state part from 9.5% to 24.5%, so the combined marginal rate goes from 18.5% to 49.25%. Savings income, such as interest, dividends and capital gains, is taxed separately at 19% to 30%.
Do children inheriting from parents residing in Mallorca pay inheritance tax?
In Spain, in practice, no. Since 18 July 2023, the Balearic Islands apply a 100% bonus on inheritance tax for spouses, ascendants and descendants, with no upper limit, so a child who inherits from parents living in Mallorca ends up paying nothing. They still have to file the return, and to keep the bonus any property must be declared at no more than its reference value plus 20%. A child living in another country may also owe inheritance tax there.
Can a non-resident foreigner apply the tax advantages of the Balearic Islands when inheriting?
Yes. Since July 2021, any non-resident heir, from the EU or from outside it, can apply the Balearic rules, which are far more favourable than the state ones, when the deceased lived in the Balearic Islands or, if the deceased lived abroad, when most of the Spanish estate is located here. So a son who lives in Germany or the UK and inherits his parents’ home in Mallorca benefits in Spain from the Balearic bonuses, not just from the general state rules.
Is the impatriate regime always suitable for a foreigner moving to Mallorca?
Not always. The impatriate regime taxes employment income at a flat 24% up to €600,000, which mainly pays off for high incomes. For medium incomes, the normal IRPF scale can work out better thanks to its reductions and personal allowances. You must opt in within six months of starting your activity, and you cannot use it if you were resident in Spain in the previous five years, so it is worth comparing both scenarios before applying.
When NOT to rush with tax residency in Mallorca
Moving your tax residence to Spain is not a good idea without first analysing:
- Your overall net worth: above €3,000,000 it is worth studying Wealth Tax and the Solidarity Tax before moving.
- The timing of the change within the year: Spain does not split the tax year, so a poorly planned mid-year move can create double taxation.
- The double taxation treaty with your home country, which changes the result depending on the type of income.
- Unrealised capital gains on your investments: it is sometimes advisable to realise them before you move.
Plan your taxation before settling in Mallorca
Spanish tax for foreigners in Mallorca has real advantages, but only if you plan ahead and coordinate the financial side with the tax side. As a wealth advisor in Mallorca, I work together with your tax advisor so that your assets, your investments and your residence fit together.
If you want the wider picture first, start with financial and tax advice in Mallorca. The first consultation is free and without obligation: call me on +34 660 845 921 or write to me through the contact page.
This content is for guidance only and does not replace personalised tax advice. Tax rules and amounts may change with each year’s budget laws.
