Living and Buying in Mallorca, The 2025 Real Estate Guide

Mallorca offers an **unparalleled quality of life** that attracts a wide range of investors and expatriates. Unlike many islands, Mallorca remains vibrant year-round, especially its capital, Palma. Its key advantages include:

• An *exceptional Mediterranean climate*, perfect for outdoor activities such as yachting and golf.
• A **sophisticated urban lifestyle** in Palma, renowned for its rich culture, Michelin-starred gastronomy, and luxury boutiques.
• Authentic rural tranquillity in picturesque villages like Valldemossa or Pollença.
• **Modern infrastructure** and reputable international schools, ideal for families.

This unique duality caters perfectly to families, active retirees, and digital nomads alike.

In 2025, the Majorca property market is distinguished by a stabilisation of prices at a high level. Foreign demand, particularly from Germany, the UK, Scandinavia, and France, remains the primary driver, absorbing an increasingly scarce supply. It is important to note that a significant premium is placed on renovated, energy-efficient properties, and especially those with a tourist rental license (ETV), which represents a true holy grail for investors.

The market is also highly segmented, with significant price disparities between the island's different geographical areas.

Understanding Mallorca's price landscape is essential to effectively target your property search. Here’s an overview of the key areas and their profiles:

• Palma (Centre & Portixol): Perfect for vibrant city life and historical charm, right by the sea, with estimated prices between €5,500 and €8,000/m².
• Southwest (Andratx, Bendinat): Mallorca's most exclusive region, sought-after for its luxurious villas and prestigious marinas, with prices potentially exceeding €12,000/m².
• North (Pollença, Alcúdia): Offers a relaxed, family-oriented ambiance, close to nature and beautiful sandy beaches, with prices ranging from €4,500 to €6,500/m².
• Inland (Inca, Sineu): For an authentic and peaceful Majorcan experience, featuring traditional Fincas, and offering great value with prices from €3,000 to €4,500/m².

The Southwest continues to be the most premium zone, while the inland areas still present excellent opportunities for those seeking space and authenticity.

While property investment in Majorca offers significant potential, it's crucial to be aware of specific considerations and common pitfalls. Key areas demanding close attention include:

• Planning Infringements: This is a very common issue, particularly for rural properties (fincas). Thorough legal due diligence is absolutely essential.
• High Taxation: The ITP (Property Transfer Tax) in the Balearic Islands is progressive and can reach up to 13% for luxury properties.
• Tourist Rental Licences (ETV): Obtaining these is now extremely difficult, or even impossible in certain areas. Never purchase based on the promise of seasonal rental income without first verifying the existence and validity of the ETV licence.

Expert local guidance is crucial to effectively navigate these complexities and ensure your peace of mind.

The first and most crucial administrative step for any foreign buyer in Mallorca is obtaining your NIE (Número de Identificación de Extranjero – Foreigner's Identification Number). This number serves as your tax and administrative identifier in Spain, and it is absolutely indispensable. Without it, no real estate transaction is possible, whether it's signing a reservation contract, the escritura (title deed), or even opening a Spanish bank account.

Property taxation is a critical consideration when purchasing real estate in the Balearic Islands. The primary tax is the ITP (Property Transfer Tax), which is levied on resale properties. In the Balearic Islands, this tax is progressive and can reach significant rates, in some cases up to 13% for luxury properties.

It is crucial to factor this substantial taxation into your budget, alongside other associated costs (notary fees, land registry fees, legal advice), which typically amount to between 10% and 12% of the total property purchase price.

Beyond the property's purchase price, additional costs are inevitable and must be carefully budgeted for. We generally recommend allocating approximately 10% to 12% of the purchase price to cover these expenses. These include:

• ITP (Property Transfer Tax), the rate of which varies depending on the property's value.
• Notary fees for the signing of the escritura (title deed).
• Land Registry fees (Registro de la Propiedad).
• Fees for your solicitor or legal advisor, essential for a thorough due diligence process.
• Potential bank fees if you secure a mortgage.

While these costs can vary slightly, this estimate provides a solid foundation for your financial planning.

The process of buying property in Mallorca follows a structured series of steps. To ensure a secure and efficient transaction, we highly recommend navigating these with expert guidance:

1. Obtaining your NIE: This is essential for any financial transaction in Spain.
2. Legal Verification (Due Diligence): A solicitor will thoroughly examine the property's legal, urban planning, and fiscal status.
3. Reservation Contract (Arras): A binding agreement between the buyer and seller, typically involving a 10% deposit of the purchase price.
4. Signing the Public Deed (Escritura): Before a public notary, the remaining balance is paid, and full ownership of the property is formally transferred.
5. Registration at the Property Registry: The property is officially registered in your name, securing your ownership.
6. Tax Declaration and Payment: This includes the Property Transfer Tax (ITP) and other relevant local taxes.
7. ETV Licence Verification: If your investment involves tourist rentals, it's crucial to ensure the existing ETV licence is valid and compliant.

Each of these steps is crucial to fully secure your investment and provide complete peace of mind.

A Tourist License, or ETV (Estancia Turística Vacacional), is a legal authorization issued by the Balearic government that permits properties to be rented out for short-term or seasonal purposes. It is absolutely vital for any investor looking to generate attractive rental income through seasonal letting in Mallorca.

Without a valid ETV license, any rental to tourists is illegal and can lead to substantial fines. This makes the ETV a highly sought-after asset, as it unequivocally guarantees the legality and enhances the potential profitability of your rental investment, providing complete peace of mind. 🛡️🇪🇸

No, it is currently extremely difficult, if not impossible in certain areas of Mallorca, to obtain a new tourist rental licence (ETV). A moratorium has been implemented by the Balearic authorities to regulate the seasonal rental market.

Consequently, for any rental investment project in Mallorca, it is imperative to target properties that already possess an existing and valid ETV licence. Do not rely on obtaining a new licence in the future, as regulations are very restrictive and unlikely to ease.

Legal verification, often referred to as Due Diligence, is a fundamental and non-negotiable step in the property purchase process in Mallorca. It involves a thorough examination of all legal, planning, and tax aspects of the property by a specialised lawyer.

This involves checking:

• The legality of the construction and the absence of any planning violations.
• The absence of any outstanding charges, mortgages, enforcement orders, or debts on the property.
• The property's compliance with the Land Registry and the Property Register.
• The validity of permits and licenses, especially the tourist license (ETV) if applicable.
• The tax situation of both the seller and the property.

This crucial step guarantees the legal security of your acquisition and prevents future risks, providing you with absolute peace of mind.

Living in Mallorca generally entails a slightly higher cost of living compared to mainland Spain. This difference is primarily due to its insular nature, which impacts the prices of consumer goods and energy. However, Mallorca remains remarkably competitive when compared to many major European capitals.

Here's a comparison of key expenditure categories:

Overall, while real estate is significantly more expensive, other expenditure categories remain manageable with a good understanding of the local market.

Yes, **living and buying property in Mallorca in 2025** remains a secure investment and a highly appealing lifestyle project. Despite the significant budget required for acquisition, the legal security of the Spanish market, price stability, and the island's exceptional quality of life justify this financial commitment.

Mallorca's international appeal ensures continuous demand and strong long-term asset appreciation. Whether you are looking for a primary residence, a luxury villa, or a rental investment, the island offers a wide diversity of properties with high potential.

Local expert guidance is the cornerstone of a successful property acquisition in Mallorca. The market is intricate and highly segmented, boasting specific legal and urban planning regulations unique to the Balearic Islands.

A local expert, such as Voguimmo, will help you to:

• Navigate market complexities and identify prime opportunities.
• Avoid critical urban planning and legal pitfalls (such as infringements or ETV licensing issues).
• Gain clarity on local taxation and optimise your investment strategy.
• Ensure rigorous due diligence and secure your transaction, providing complete **peace of mind**.
• Save valuable time and enjoy complete peace of mind throughout the entire process.

Their in-depth, on-the-ground knowledge is indispensable for a seamless and successful property acquisition.