Tourist Rentals in Mallorca

Together with Barcelona, the Balearic Islands are at the forefront of legislating to control holiday lettings, ranging from strict time limits in some areas to outright bans in others. Some locations, the authorities say, are ‘saturated’ and the debate is essentially between those who say tourism is vital for the island and those who say it is destructive. Somehow, a balance has to be found because there’s no getting away from the fact that about 45% of the Balearics’ GDP is generated by tourism associated activities.

The appetite for further restrictions seems to be relentless and further changes to the law and strict enforcement measures can be expected. While Mallorca is, and will remain, one of the most desirable of Spain’s regions for overseas buyers, if part of a buyer’s strategy includes letting the property for short-term holiday rentals then it is essential to do thorough research and be aware of the the rules. In addition, take into account the fact that even tighter controls are almost guaranteed to be introduced in future.

The reasons behind the restrictions are the same as in I highlighted in my blogs about Madrid and Barcelona and these include:

• Local discontent because of noise and disruption.
• Affordability issues, with residents unable to rent or buy in their own towns and near their work.
• Reduction of long term renal stock as landlords move into the holiday sector and evict existing tenants.
• Hollowing out of buildings, towns and villages to the extent that no local people remain and many properties are left unoccupied for long periods.

In February 2022, the regional government announced a four-year freeze on the creation of more hotel beds or private rentals to tourists. Broadly speaking, a property that is rented for any period of less than 30 days falls into the category of a tourist rental. During this moratorium period the four islands that make up the Balearics must determine the number of tourist places they can sustain. By devolving the decision making process in this way each island can focus on what works best for them. It is hoped that the emphasis will be on quality not quantity. Properties that already hold a tourist rental licence may continue to rent within the rules specific to the location and property type during this consultation period.

Click on the map below to enlarge it and see that various zones as they currently stand. 

The key is as follows:

• Red: classified as ‘saturated’ coastal areas in which short term rentals are limited to a maximum period of 60 days per year in an owner’s main residence. 
• Orange: Coastal areas where rentals are allowed throughout the year with no maximum number of days.
• Purple: towns and villages in the interior considered ‘saturated’ and subject to the 60 day maximum. 
• Blue: no maximum and allowed throughout the year.
• Yellow: apartments have a 60 day limit while houses can be rented throughout the year.
• Green: protected areas with no possibility of new licences.
• Grey: industrial zones, no renting allowed.
• White: Palma city. 

If there is one word to best describe the situation in Mallorca as regards tourist rentals that word would be ‘complicated’ For example, the 60 day maximum that applies to certain properties in certain locations is not straightforward. The 60 days must be allocated as two full months, not necessarily connected. However, the months of July and August can’t be connected, owners must pick one or the other. So, June and July would be allowed, or August and September. Neither would 15 days in June and 15 days in July be allowed, whole months only.

As regards Palma, a recent judgement (February 2023) from Spain’s Supreme Court has upheld the 2018 ban on tourist rentals in the Palma municipality. An appeal was lodged in the High Court of Justice of the Balearic Islands in 2021 but this has been struck down by the higher court. The result is that no apartments in multi-home buildings can be rented to tourists in future while in certain zones within the municipality houses and villas are exempt from this ruling.   

So, if you are thinking about a purchase in Mallorca and part of the plan is to do some rentals get good advice in advance. The Property Finders Mallorca partner knows all there is to know about these complex rules. Getting it wrong could expose you to a fine between €20,0000 - €40,000 for renting without a touristic licence or up to €400,000 for breaking the regulations associated with a licence. And take into account that how it is today may well change when the moratorium ends in 2026. It’s possible nothing will change but the indications coming out of Mallorca are that the most likely outcome will be further restrictions.

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