Comprehensive Guide to Renting Out Property in Mallorca in 2024: rules, zoning regulations, ETV

Contents:

1. Introduction

1. Overview of Popularity of Holiday and Property Rentals in Mallorca

2. Analyzing Mallorca's Rental Landscape: Costs and Profitability for Property Owners

3. The Popularity of Buying a Property in Mallorca to Rent

2. Rules for renting a property in Mallorca

3. New Rental Regulations in Mallorca: Impact on Property Market

1. Classification as "Holiday Rentals"

2. Lease Term Restrictions

3. Restriction on Issuance of New Rental Licences during the Holiday Period

4. Update July 2023: New Rental Housing Opportunities in Mallorca

5. Zoning in Mallorca

6. ETV Tourist Licences in Mallorca

1. What is ETV?

2. Instructions for Checking a Spanish Tourist Licence and Obtaining an ETV

7. Conclusion

8. About Us: Your Expert Partner for Property Investment in Mallorca

Introduction

Welcome to Mallorca, the jewel of the Mediterranean, a sought-after destination for tourists and prospective property buyers. This article delves into crucial aspects of property rental rules in Mallorca, encompassing recent legislative changes, zoning intricacies, and licensing requirements. This information proves beneficial not only for property buyers but also for those contemplating future investments in rental accommodations in Mallorca.

Overview of Popularity of Holiday and Property Rentals in Mallorca

Mallorca, with its picturesque landscapes, crystal clear waters and historical sites, attracts tourists from all over the world. 

The Mallorca Tourism Association estimates the number of tourists arriving on the Balearic Islands up to June 2022 to be 5.2 million. On average, 14 million tourists visit Mallorca per year. But in recent years, the trend has been towards more tourists. Passenger traffic is growing every year. And often exceeds 17 - 18 million people a year.

As a result, the demand for rental property on this Spanish island is growing yearly. This is reflected in the cost of renting a property in Mallorca, availability for occupancy, and changes in the legislative documents that regulate the issues of renting out accommodation.

Analyzing Mallorca's Rental Landscape: Costs and Profitability for Property Owners

Delving into property investment in Mallorca combines enjoyment with profitability. Explore average rental prices across property types, providing insights into expected returns for owners. This guide aids potential investors in identifying lucrative opportunities within the rental property market.

As of October 2023, the average rental price in the Balearic Islands is 16.1 €/m2, primarily for long-term rentals (3 months or more). During the peak tourist season, rental property prices in various Mallorcan areas surge, ranging from 50% to 200%.

Discover prime areas in Mallorca where tourists frequently seek rental properties:

Despite ongoing discussions about global economic instability, the data in the table reveals a contrasting reality. Purchasing power hasn't merely remained stable but has seen a notable increase. It's crucial to emphasize that this trend extends beyond just renting a property in Mallorca and buying and selling.

Tip: Rely on professional advice and avoid being swayed by rumours.

The popularity of Buying a Property in Mallorca to Rent

Purchasing property in Mallorca for subsequent rental is gaining popularity among many investors.

Analyzing the number of property transactions in the Balearic Islands from January to August for 2022 and 2023. Data sourced from the official website of the National Institute of Statistics (INE).

In 2023, the number of transactions in the Balearic Islands decreased by 17% compared to 2022, while the total transaction value changed significantly less. In 2023, foreign investors actively bought real estate.

Read more in the article Mallorca Reclaims the Peak of Foreign Investor Interest in 2023.

row 1 = zero line

row 2 = 2019

row 3 = 2020

row 4 = 2021

row 5 = 2022

row 6 = 2023

In 2023, property transactions mirrored the pre-COVID levels of 2019, indicating stabilization after the strong growth in 2022 attributed to the post-COVID rebound.

Simultaneously, the average cost per square meter in the Balearics rose from €3,557/m2 to €4,034/m2 between September 2022 and 2023, marking an 11.8% increase. Since September 2019, the average cost has surged from €3,055/m2 to €4,034/m2 in 2023, reflecting a substantial 24% rise.

Rules for renting a property in Mallorca

Mallorca, a premier Mediterranean tourist destination, boasts unique rules ensuring order and safeguarding tenants and landlords. Let's delve into critical aspects of property rental rules in Mallorca.

Registration and Licensing:

Property owners must register and secure the requisite rental license (ETV) to align with tourism laws and tenant safety. The ETV, a pivotal legal element, must be valid when leasing the property.

Long-term and Short-term Leases:

• Long-term Rentals: Extend beyond the typical tourist season (3 months or more), necessitating special agreements.

• Short-term Rentals: Tied to seasonal tourist flows, subject to stringent rules and controls.

Zoning and Regulation:

• The Mallorca government rigorously oversees zoning for rental properties.

• Certain areas may restrict short-term rentals; researching local zoning regulations is crucial.

• Utilize the Ayuntamiento website or visit in person to clarify questions about renting your property.

Mallorca Property Rental Guidelines

Rental policies in Mallorca encompass:

• Mandatory Registration and Licensing (ETV): Property owners must register and obtain the necessary license (ETV) for legal compliance.

• Long-term and Short-term Leases: Properties are categorized into long-term (3 months or more) and short-term leases, each with distinct considerations.

• Zoning Law Compliance: Adherence to local zoning laws is crucial to navigating restrictions on short-term rentals in specific areas.

• Party Liabilities: Tenant-landlord responsibilities favour tenants, reducing their risks in most cases.

• Tax Obligations: Property owners are obligated to pay taxes on rental income.

• Rent and Deposit Payments: Tenants must adhere to the rental agreement, including rent and deposit payments, as stipulated.

Renting Your Property in Mallorca: Renting out your property is possible, provided you meticulously adhere to all legal requirements. This involves registration, licensing, and a thorough understanding of local zoning regulations.

New Law Rental Regulations in Mallorca: Impact on Property Market

Recent amendments to Mallorca's rental laws, governed by the Balearic Islands Tourism Law, have significantly changed the property rental landscape. Let's delve into the key aspects of these modifications and their implications for property owners and tenants.

Classification as "Holiday Rentals"

As of June 18, 2022, Mallorca rentals fall under the "holiday rentals" category if the property is leased for a short period for profit. The previous distinction between short-term and long-term rentals has been revised. Previously, rentals under 30 days were considered holiday rentals. Still, the new rules focus on the nature of the rental for marketing purposes.

Lease Term Restrictions

A clear definition now limits holiday property rentals to daily or weekly durations not exceeding one month. This innovation centres on the commercial nature of the rental rather than its duration. Therefore, even a rental surpassing one month is considered a holiday if it caters to a tourist clientele.

Restriction on Issuance of New Rental Licences during the Holiday Period

As of July 2023, the Balearic Islands Government has suspended issuing new holiday rental licences until at least 2026. This restriction extends to increasing the number of hotel beds. Existing licence holders, however, retain the ability to continue operations.

Update July 2023: New Rental Housing Opportunities in Mallorca

The recent political shift in the Balearic Islands marks a turning point in rental regulations, ushering in new possibilities for property buyers and owners engaged in tourist rentals. Let's delve into the critical aspects of this update.

1. Tax Benefits and New Opportunities: The Conservative People's Party (PP) government introduces tax incentives, potentially offering reduced rates, exemptions, or privileges to property owners renting to tourists. These measures aim to stimulate investment and foster tourism sector development.

2. Liberalization of Tourist/Holiday Rentals: A pivotal element in the new government program is the liberalization of tourist and holiday rentals. This entails easing restrictions, simplifying the licensing process for holiday rental properties, and streamlining procedures for property owners.

3. Lifting the Moratorium on New Licences: The new government direction signals the end of the moratorium, which has been in place since 2022, hindering the issuance of new tourist rental licences. Property owners facing previous restrictions can now explore fresh rental opportunities.

4. Dependence on Vox Support: Notably, the NP government, now a minority government, relies on the support of right-wing populists Vox. This may impact the proposed changes' final formulation and implementation, necessitating additional efforts and compromises through party agreements.

5. Further Updates and Developments: The dynamic situation in the Balearic Islands prompts our commitment to keeping you informed about any subsequent updates in Majorca's rental regulations. This is crucial for property owners or those contemplating purchasing on this captivating Spanish island.

Zoning Regulations in Mallorca

Zoning in Mallorca is pivotal in regulating property rentals while safeguarding the island's natural and cultural heritage. Let's explore the critical aspects of zoning and its impact on rental regulations and dissect specific restrictions and requirements outlined in competitive information.

1. ETV Licence and Property Type Restrictions: Certain property types may have limited or no eligibility for an ETV (tourist licence). These include properties on protected land, rentals exceeding one month, or those in specific zones. Considering these restrictions is crucial when planning a property rental in Mallorca.

2. Zoning and Expert Opinion: Dr. Dominic Port, a respected German lawyer in Mallorca, emphasizes the significance of the Mallorca Area Designation Plan (PIAT) on holiday rentals. Comparable to Germany's regional plan, PIAT outlines measures regulating tourism, particularly rules for short-term rentals.

3. Time Restrictions for Tourist Rentals: Article 39 of the PIAT imposes time constraints on marketing tourist rentals in registered accommodations. Notably, rentals in both high-season months (July and August) are prohibited in saturated areas, requiring specific details in the Declaration of the Start of Tourism Activities (DRIAT).

4. Landscape Quality and Energy Efficiency Conditions: Article 40 of the PIAT establishes landscape quality conditions for registered dwellings to preserve the traditional landscape and uphold minimum quality standards. These standards encompass native plants, water-saving systems, and structural location conditions.

5. Measures to Improve Energy Efficiency: Article 41 of the PIAT outlines energy efficiency measures for registered facilities, including requirements for energy class, heating/air conditioning, water heating systems, and the potential need for electric vehicle charging stations.

6. Maintaining the Natural State in Rural Areas: In rural areas, Article 41 of the PIAT mandates registered dwellings to maintain part of the land in its natural state or allocate it for agriculture, livestock, or forestry.

These zoning intricacies are pivotal considerations when renting a property in Mallorca. For any uncertainties or queries, consulting with a lawyer is advised to ensure compliance with all regulations and to mitigate potential issues.

ETV Tourist Licences in Mallorca

Understanding the Essence and Importance of ETV (Licencia de Alquiler Turístico) in Mallorca, Spain

What is ETV? 

The ETV (Estancia Turísticas en Viviendas) Tourist Licence is a vital official permit issued by the Balearic Islands authorities in Spain, ensuring properties meet safety and comfort standards for tourist rentals. Property owners must obtain this licence to offer accommodations for tourist stays legally.

Instructions for Checking a Spanish Tourist Licence and Obtaining an ETV:

1. Tourist Apartment Categories:

• Ensure "tourist apartments" meet regional tourist category requirements.

• Typically falls under "accommodation for tourist use," allowing the conversion of various property types, provided minimum standards are met.

2. Official Registration Number:

• Legal tourist flats must have a registration number from the regional authority.

• This number should be publicly available on all advertising platforms like Airbnb and Booking.

3. Understanding ETV:

• Verify whether the property owner holds an ETV tourist licence through your real estate agent, the Balearic Government website, or directly with the owner.

4. Verification on the Official Website:

• Use the Tourism Board's official portal to check the legal status and details of the licence.

• Access the licence register on the Tourism Board's website.

5. Contact the Owner:

• Request the owner to provide their tourist licence number, which can be cross-verified with the official register.

6. Legal Advice:

• If uncertain, consult a real estate lawyer in Spain to address doubts or questions about a tourist licence and avoid potential legal issues.

7. Procedure for Obtaining ETV:

• Property owners planning to rent to tourists should apply to local authorities for an ETV tourist licence.

• Provide documentation demonstrating accommodation meets safety and comfort standards.

These steps are crucial for safely and legally renting a property in Mallorca. Verifying the licence ensures a quality and legal stay for tourists.

Conclusion

Renting a property in Mallorca involves critical considerations to ensure a comfortable and legally compliant stay. This article has explored vital points to guide you through the process successfully.

1. General Rules and Amendments:

• Thoroughly understand the general rules for renting in Mallorca.

• Stay informed about the latest legal changes to remain compliant and prevent potential issues.

2. Zoning and Licensing Issues:

• Grasp the significance of zoning and licensing, including ETV and tourist licences.

• Ensure your chosen property meets tourist category requirements and meets all necessary criteria.

3. Recommendations for Selection and Inspection:

• When selecting accommodation, scrutinize its status, registration numbers, and the presence of required licences.

• Verify these details on official platforms and seek legal advice if any uncertainties arise.

These considerations are pivotal for a seamless and legally sound property rental experience in Mallorca.

About Us: Your Expert Partner for Property Investment in Mallorca

Investing in Mallorca real estate? Trust the expertise of Yes! Mallorca Property. Our professionals guide you through the entire process of selecting and buying a home. We provide crucial insights into rental regulations and help secure a tourist licence, ensuring a safe investment with maximized returns.

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