Buying a yacht on Mallorca

Since 1 January 2021, UK residents and UK-flagged yachts have lived under a different EU regime. The headline change: a Red Ensign-flagged yacht inside EU waters now operates under Temporary Admission, which permits an 18-month uninterrupted stay before the yacht must physically exit EU waters and re-enter. For yachts kept full-time on Mallorca, this 18-month clock becomes the most consequential operational constraint.

Two structural responses dominate among the UK buyers I work with. Response one: keep the UK flag, embrace the 18-month rhythm, plan an annual or biannual trip to Türkiye, Croatia or Morocco — the rhythm becomes part of the boat's life and the structure stays simple. Best fit: buyers who actually enjoy multi-country cruising and aren't tied to Mallorca for 12 months a year. Response two: switch to Spanish or Maltese flag through an EU-domiciled vehicle (a Spanish SL, a Maltese company, a Gibraltar ownership structure where applicable), pay Matriculación at 12% if Spanish-flagged, eliminate the 18-month clock entirely. Best fit: buyers who want full-time Mallorca berthing without the calendar tension.

There is no right answer. The decision turns on use pattern, tax residency and charter intent. What is wrong: choosing the structure after you've committed to a specific yacht. The numbers compound: a yacht bought through the wrong structure can cost the owner £40,000–80,000 in avoidable tax over the first three years. The hour spent with a competent Mediterranean yacht-tax advisor before you make an offer is the single highest-leverage hour in the entire transaction.

VAT (IVA, 21%): applies to any yacht that becomes a "Spanish import" — the EU customs term for a non-EU-paid yacht entering the EU single market. A yacht with a valid EU VAT-paid invoice from any EU member state circulates freely; you do not pay VAT again. A yacht moving from UK ownership to EU ownership without prior VAT clearance owes 21% on the open-market value at import. Older yachts where the original invoice is lost can use a "deemed VAT-paid" route based on EU residence at specific dates — your tax advisor will determine eligibility.

Matriculación (12%): the Spanish vehicle registration tax, extended in 1992 to recreational yachts ≥8 m. It applies on first registration under the Spanish flag. The two practical exemptions are charter-eligibility (fully commercial use under a Charter Activity certificate, with very specific operational requirements) and yachts kept under EU non-Spanish flags. A 60-ft yacht with an open-market value of £1.2M, Spanish-flagged: £144,000 Matriculación. This is the tax that makes flag choice consequential.

Patrimonio (Wealth Tax): applies to Spanish tax residents on worldwide assets above the regional threshold (€700,000 in most regions). UK non-residents are not subject to Patrimonio on Spanish-located yachts unless they spend >183 days per year in Spain. Most UK buyers I work with keep below the residency threshold deliberately; if you cross it, the wealth-tax bill on the yacht itself becomes material.

Inheritance Tax (ISD / UK IHT): often forgotten in the heat of purchase. Spanish ISD applies to assets located in Spain at death, with rates and exemptions varying by region and beneficiary relationship. UK IHT also follows the asset regardless of location. A yacht held under personal name, with a UK domiciled owner who dies, can trigger double taxation; an EU-resident vehicle solves the Spanish side but doesn't help the UK side. This is solvable with planning; it is not solvable retroactively.

The 8–12%-of-purchase-price rule of thumb is correct but coarse. A more useful breakdown for a typical £1.5M, 60-ft motor yacht based in Puerto Portals, with no permanent crew and 80–100 hours of seasonal use:

1. Briefing and structure decision (weeks 1–4). Use case, crew set-up, home-port commitment, charter intent, budget — and crucially the tax-structure decision with your accountant. This step is the longest because it must be the longest; getting it right saves the next four steps from compounding errors.

2. Shortlist building (weeks 3–6, often overlapping with step 1). Three to five concrete yachts that fit your spec — drawn from the public listing pool (YachtWorld, TheYachtMarket, Boatshed) and from off-market sources I cultivate through marina networks. About 40% of my completed Mallorca sales are off-market boats that never appear on a listing site.

3. Viewings on Mallorca (1 trip, 2–3 days). I attend every viewing in person. We walk each yacht together — systems, layout, comfort, the details that no broker description captures. Honest strengths and weaknesses of each candidate, not the seller's pitch.

4. Offer, survey, sea trial (weeks 5–10). Binding offer with MYBA contract and 10% escrow deposit. Independent surveyor (I recommend three — none in my referral chain) for both the technical hull/engine survey and the sea trial. The surveyor's findings reset the negotiation, sometimes meaningfully.

5. Contract, flag transfer, closing (weeks 8–16). MYBA standard contract, parallel Spanish flag transfer if you've chosen that route (3–6 weeks in season), Patrimonio assessment if you've crossed the residency line, insurance binding, berth permit, handover with inventory. I remain your single contact through every step.