Buying in Menorca from abroad

Decide the use before the house

Almost everyone begins by looking at properties. In Menorca that is the second decision, not the first. The first is what the house is going to be: a year-round residence, a family house for the season, or an asset you expect income from.

This is not a sentimental question. Three things that cannot be changed afterwards follow from the answer:

• The viable area. Living here year-round requires services, a hospital, schools and the airport within reach — which narrows the map to Maó, Es Castell and their surroundings, and to Ciutadella. For seasonal use the whole island opens up.
• The tourist licence. If letting is part of the plan, a house without a licence is of no use to you, however well priced. I explain this in the next decision.
• Your tax position. A non-resident and a Spanish tax resident are taxed differently, both before and after the purchase. It is worth modelling before signing a deposit contract, not after.

The costliest mistake is not overpaying for a house. It is buying the right house for a use that was never yours.

The tourist licence travels with the house

This is the Balearic particularity that surprises buyers most, and the one that most determines what a property on the island is worth. A holiday letting licence is not a formality to be arranged after completion: it is attached to the property and to its registered places. Either you acquire it with the house, or you do not obtain it.

The framework is Ley 8/2012 of 19 July, on tourism in the Balearic Islands. On top of it, Decreto ley 3/2022 of 11 February suspended the processing of new holiday letting registrations, for a maximum of four years from its entry into force, with narrow exceptions in the territorial reconversion areas delimited in Menorca's Island Territorial Plan. Decreto ley 4/2025 of 11 April added compulsory electronic processing for owners and marketers, together with measures against illegal supply.

Translated into what matters in a negotiation:

• Two identical houses, one with a licence in force and one without, are not worth the same. The difference is not cosmetic: the second cannot be let legally and, as things stand, cannot apply.
• A vendor saying “this house has always been let” evidences nothing. What evidences it is the registration number and the places attached to it.
• Illegal supply is actively pursued, and the marketing platforms share liability.

I do not print an end date for the moratorium here, because its validity and any extensions change, and a wrong date in a document like this is worth less than none. What I do, in every transaction, is verify it with the Consell Insular before you make a formal offer.

The real cost of completion: Balearic ITP, AJD and VAT

Menorca is not taxed on the Catalan scale. This is worth saying early, because almost all English-language material on “buying in Spain” is written from Barcelona or Madrid. On a resale purchase the Balearic transfer tax (ITP) applies, on a cumulative scale rather than a flat rate.

One detail that is frequently copied across wrongly: the Balearic scale has no 11% band. It moves from 10% straight to 12% above one million. On prices that are real on the island, the effective rate works out as follows:

• €900,000 → €80,000 in ITP (8.89% effective)
• €1,200,000 → €114,000 (9.50%)
• €1,500,000 → €150,000 (10.00%)
• €2,400,000 → €262,000 (10.92%)
• €3,500,000 → €405,000 (11.57%)

The taxable base is not always the price: it is the higher of the purchase price and the Land Registry reference value (valor de referencia de Catastro). Buying below the reference value does not reduce the tax, and it does invite a review.

The remaining completion items:

• AJD (stamp duty on notarial documents) — 1.5% as a general rate. 2% on first copies of deeds and instruments documenting a transfer for consideration or the creation of rights in rem over property where the actual or declared value is €1,000,000 or more. Relevant on new-build purchases and on mortgages executed by public deed.
• New build — no ITP: VAT at 10% (national) plus the applicable Balearic AJD.
• Notary and Land Registry — between 0.3% and 0.7% of the price.
• Gestoría or solicitor — €1,200 to €3,500 depending on complexity, and at the upper end for non-residents.

One comparison that tends to settle the conversation: at €1,500,000, the same purchase pays €165,000 in ITP in Catalonia and €150,000 in Menorca. The Balearics are cheaper through the middle of the range and converge at the top. It is not a reason to buy on the island, but it is a figure almost nobody arrives having done.

NIE, bank account and power of attorney: order matters

This is the least interesting part of a purchase and the one that delays most transactions. The correct order is as follows, and it admits no shortcuts:

• 1. NIE. The foreigner's identification number is the starting point. Without it you cannot open a Spanish bank account, sign a deposit contract with any real protection, or apply for a mortgage. It is obtained at the Spanish consulate in your country or in Spain; either route requires an appointment, and the timescales are best started on day one rather than day ninety.
• 2. A Spanish bank account. Needed for the completion payments and for standing orders on utilities and local taxes. Banks will ask for the NIE and for evidence of source of funds: prepare that documentation, translated, before requesting the appointment.
• 3. Power of attorney. If you cannot be on the island on the day of signing, a power granted before a notary — or at a Spanish consulate, with a Hague Apostille where required — allows completion in your name. It is what I use with most buyers who live abroad.

Menorca adds a logistical factor of its own: air connections thin out outside the season. A November completion requiring your presence means a journey that in August would be trivial. A power of attorney solves that.

A mortgage as a non-resident

Spanish banks do lend to non-residents. Terms are somewhat tighter than for residents, and the proportion financed depends above all on where you are tax resident:

• EU tax resident — typical LTV of 70% to 80%, term up to 30 years.
• Non-resident, EU — LTV of 60% to 70%, term up to 25 years.
• Non-resident, outside the EU — LTV of 50% to 60%, term of 20 to 25 years.

The usual structures are mixed rate (five years fixed, variable thereafter) or fixed over 25 years. Arrangement fee of 0.5% to 1%, negotiable. The banks most active with non-resident buyers are BBVA, CaixaBank, Sabadell, Santander Select and ING.

Two warnings particular to the island. First: in a market with few comparable transactions, the bank's valuation may come in below the agreed price, and the bank lends against valuation, not price. Second: if the purchase depends on financing, say so in the offer. In a short inventory, a buyer who presents as a cash purchaser and then needs a mortgage loses credibility — and with it, the property.

What you will pay every year — and on the day you sell

Buying is a payment. Owning as a non-resident in Spain is an annual obligation, and it is the part that rarely comes up in early conversations.

Every year, without letting the house:

• Non-resident income tax on imputed income. Even if the house is for your own use and stands empty eleven months of the year, the tax authority imputes an income to you: 1.1% of the cadastral value where the municipality's general revaluation took effect in the tax period or in the ten preceding ones, and 2% otherwise. That base is then taxed at 19% if you are resident in the EU, Iceland, Norway or Liechtenstein, and at 24% in all other cases. Declared on form 210.
• IBI — the municipal property tax, varying by municipality and cadastral value.
• Community fees, insurance and maintenance — on a villa with pool and garden, off-season maintenance is a real cost, not a residual one.

If you let the property, the income is also taxed under the non-resident regime, at different rates and with different rules on deductible expenses depending on your country of residence. And you may only do so if the house holds a licence — see decision 02.

On the day you sell, as a non-resident: the buyer is obliged to withhold and pay over 3% of the consideration using form 211, within one month of the transfer, on account of your non-resident income tax. You then declare the gain on form 210. Add the municipal capital gains tax (plusvalía), set by each town hall.

Wealth tax: the one almost nobody anticipates

Spain is one of the few countries in the European Union that still levies a wealth tax, and for international buyers it tends to be the larger surprise. A non-resident is taxed on a limited basis: on assets situated in Spain.

Two reference points worth knowing, without drawing your own position from them:

• The Balearic Islands raised the regional tax-free threshold from €700,000 to €3,000,000 with effect from 1 January 2024.
• On a limited basis, the national reference for the tax-free threshold is €700,000.
• Separately, the Temporary Solidarity Tax on Large Fortunes applies to net wealth above €3,000,000, accruing on 31 December.

Which of those applies to you depends on your tax residence and on the composition of your assets. It is not a question for an estate agent to settle, and you should be wary of anyone who settles it in one sentence.

Buying no longer grants residency

For years, a good proportion of international buyers arrived convinced that buying a property gave access to Spanish residency. That route — the Golden Visa — ended on 3 April 2025, and no new applications are accepted.

The practical consequence is simple, and worth being clear about before signing: the purchase and residency are now two separate decisions. Buying a house in Menorca grants you no residence permit, and the routes that remain open are chosen on professional profile and tax position, not on the size of the transaction.

If, beyond the house, you intend to settle in Spain, that second conversation has rules of its own and deserves a specialist adviser. What you must not do is buy on the assumption of a right that no longer exists.

Choosing the area by how you will use the house

Menorca is small, and from any point you reach any other in under an hour. That makes people assume the area hardly matters. In summer it largely does not; in February it does.

• Maó and Es Castell — services all year, hospital, schools and the airport close by. The natural base for those who want to live on the island rather than visit it. Es Castell adds the bay and Cales Fonts a few minutes from the centre.
• Ciutadella — a medieval old town, stone palaces and access to the western coves. Less administrative than Maó, more beautiful. The choice for buyers who put architectural character first.
• Sant Lluís and Cala Llonga — the residential south: Binibeca, Punta Prima, Binissafúller, the cliffs of S'Altra Banda. Villas with pools and a settled international community, largely British and German.
• Fornells and Es Mercadal — the north. A sheltered bay, a quiet atmosphere, nature ahead of services. Front-line property is scarce and much sought after.
• Alaior, Ferreries and Es Migjorn Gran — the interior and the central south. Estates, country houses, and better value between plot and price than the coast. Ferreries holds the island's most discreet transactions.

On budget, speaking of a quality house in good condition: a realistic entry point sits between €700,000 and €1.2M depending on the area. The most active range for villas with sea views runs from €1.5M to €3.5M. Above €4M you reach singular estates, town palaces in the historic centre, or exceptional positions over the harbour or the coast.

Due diligence and the real timeline

With the NIE and the bank account already in place, the process from first viewing to signature before a notary usually takes six to ten weeks. For buyers travelling from abroad I concentrate viewings into a few days, and I complete under power of attorney when they cannot be present.

What I verify before you commit to a deposit contract:

• Land Registry extract (nota simple) — title, charges, mortgages and easements.
• Tourist licence — registration number and places, with the Consell Insular, where letting is part of the plan.
• That what is built matches what is registered — unlegalised extensions, pools and outbuildings are common in country properties, and become the buyer's responsibility once the deed is signed.
• Habitation certificate and utilities — with particular attention to water supply on properties outside urban boundaries.
• Land Registry reference value and cadastral value — the first sets the ITP base; the second, the annual cost.
• Community accounts and pending levies, on developments.

On inventory: a good part of the best of the island never reaches a portal. It moves between owners, notaries and local agents, and many sales are discreet by the owner's choice. I work those relationships directly. Give me your exact criteria — budget, size, area, views, licence — and I will tell you when something fits, before it reaches the open market.

Sources

Figures verified on 31 August 2026 against the following official sources. Tax rates and tourism regulation change: confirm they remain in force before acting on them.

• Balearic ITP scale and AJD rates — Agència Tributària de les Illes Balears (ATIB), on Decreto legislativo 1/2014 of 6 June (BOE-A-2014-6925), as amended by Ley 12/2023 of 29 December.
• Imputed income and non-resident income tax rates — Agencia Tributaria.
• The 3% withholding on acquisitions from non-residents — Agencia Tributaria.
• Holiday letting registration and the moratorium — Consell Insular de Menorca, on Ley 8/2012, Decreto ley 3/2022 and Decreto ley 4/2025.

This guide is general information and does not constitute tax or legal advice. Every transaction should be modelled with your own adviser.