Buying Property in Mallorca in 2025? Top tips from Palma Property Lawyer

Author: Rosa T.

Profession: Lawyer

Completed cases: 578

Rosa T. has been helping English-speakers buy property in Mallorca over the last 15 years, and here she guides you on what you should and shouldn't do if planning on acquiring property on the island.

View Rosa's full Bio

Author: Rosa T.

Rosa T. has been helping English-speakers buy property in Mallorca over the last 15 years, and here she guides you on what you should and shouldn't do if planning on acquiring property on the island.

Speaks languages:

View Rosa's full Bio

Mallorca, (also Majorca), is the largest of the Balearic Islands in Spain, situated in the Mediterranean Sea.

Boasting luxury villas, and indeed luxury apartments to choose from, Mallorca has established a reputation for attracting high-net worth individuals and families. Indeed, it is not uncommon to hear of people who buy property in Mallorca and then commute to work in the UK!

Great care should be taken if you plan to commute from Mallorca, since you could well be considered resident for the purposes of Spanish income tax!

If you are buying property in Spain and are particularly interested in Mallorca, below is a summary of some important issues that you should be aware of before placing an offer on any property.

The property market in the Balearic Islands has seen significant trends in pricing and foreign buyer activity as outlined in the most recent report from the Spanish Land Registries.

Foreign Buyers' Share of Market

There has been a sustained interest from international buyers despite a general slowdown in transaction volumes, according to figures from the Land Registries Association of Spain foreign purchases have remained considerably high, taking a 35.63% share of all property acquisitions by foreigners in Spain! This is significantly higher than any other region, underscoring the Balearic Islands' appeal as a prime location for investment and residential purposes by the international community.

The market dynamics in the Balearic Islands also reflect a trend where prices have progressively increased, maintaining their upward trajectory even as other areas have started to stabilize or decrease. This may be attributed to the enduring allure of the islands' lifestyle, climate, and amenities, which continue to attract a wealthy international clientele.

Cost of Buying Property in Mallorca

During the fourth quarter of 2023, the Balearic Islands continued to exhibit one of the highest average property prices in Spain, at 3,496 euros per square meter. This figure not only tops the pricing charts when compared to other regions but also indicates a robust demand in this locale, particularly from foreign buyers.

In comparison, regions like Madrid and the Basque Country also reported high prices but were still lower than the Balearic Islands, with average prices per square meter of 3,280 euros and 2,912 euros, respectively. The contrast is even more pronounced when compared to the less expensive regions such as Extremadura, where the average price per square meter is significantly lower. 

In summary, the property market in the Balearic Islands stands out with its high property values and substantial foreign buyer interest. Despite broader market challenges, these islands have sustained their position as a top-tier real estate market within Spain, driven by continuous foreign investment and the inherent desirability of the location.

Not only can they buy property in Mallorca, foreign purchasers have a larger share of the local market in Mallorca than anywhere else in Spain! This has caused some disquiet among some members of the local population.

Late in 2022, the regional government in the Balearic Islands - including Mallorca, Ibiza and Formentera - initiated a study to consider the prohibition from making a property purchase in the area, anyone who has not been a resident there for at least 5 years. However, such a prohibition is unlikely to survive legal scrutiny within the context of a fundamental pillar of the EU being free movement of people. As of April 2023, no such ban has been implemented.

Of course, if you are not an EU Citizen - or able to benefit from a family member being an EU Citizen, you will need to overcome the immigration hurdles, should you wish to spend more than 90 days in any 180 day period in your property in Mallorca. There are a number of visa options available, with the most popular - in terms of volume - currently being the non-lucrative visa and the relatively recent digital nomad visa.

Given the value of properties in Mallorca, a relatively higher number of golden visas (ability to reside and work in Spain at the holder's discretion on investment in real estate over €500,000) are issued here, though this visa may have its days numbered, according to recent government announcements of plans to withdraw this option.

So, assuming you have found a property you like, you are confident you will be able to stay in Spain sufficiently long to enjoy the property and you've made an offer on it, what steps do you need to take to ensure that you buy property in compliance with Spanish law?

While only an island, there are still notable variations in the different locations. Of course, the arguably most beautiful areas of the island command a higher price for property. Below you will find a brief description of the most popular among those relocating to Mallorca:

Palma de Mallorca

Palma, the capital of Mallorca, is a vibrant and cosmopolitan city that manages to blend historic charm with modern living. Its Old Town is a maze of narrow streets, grand palaces, and historic landmarks like the stunning La Seu Cathedral. 

Palma offers a wide range of amenities, including high-end boutiques, gourmet restaurants, and a bustling nightlife. The waterfront promenade and marina are perfect for leisurely strolls and enjoying the Mediterranean views. 

The city is also a cultural hub, with numerous art galleries, museums, and theaters, making it a desirable location for those seeking a dynamic urban lifestyle with a rich cultural backdrop.

The average price per square meter in the city center is around €3,500 to €5,000, while outside the center, it can range from €2,500 to €3,500.

Palma: Pros & Cons

1. Extensive cultural and recreational amenities.
2. Excellent transport links, including an international airport.
3. Vibrant nightlife and dining scene.
4. Higher cost of living compared to other areas.
5. Traffic congestion in peak tourist season.
6. Noise and bustle of city life may not suit everyone.

Port Andratx

Port Andratx is a picturesque fishing village turned luxury hotspot, renowned for its upscale real estate, including modern villas and traditional fincas with breathtaking sea views. 

The area is home to a charming harbor filled with yachts and fishing boats, exclusive waterfront restaurants, and chic boutiques. The surrounding mountains and coastline offer plenty of opportunities for outdoor activities such as hiking, sailing, and diving. Port Andratx attracts a discerning international community, creating a vibrant social scene. 

Accordingly, it's an ideal location for those seeking a luxurious, laid-back lifestyle with all the conveniences of modern living.

Port Andratx: Pros & Cons

1. Stunning sea views and luxurious properties.
2. High-quality dining and shopping options.
3. Active expat community and social scene.
4. High property prices and cost of living.
5. Limited availability of everyday amenities.
6. Can be crowded during peak tourist seasons.

Sóller

Sóller, nestled in a lush valley in the Tramuntana Mountains, is known for its stunning natural beauty and rich cultural heritage. 

The town is famous for its historic tram that connects Sóller to the Port de Sóller, a charming coastal area with sandy beaches and waterfront cafes. The area is dotted with traditional Mallorcan houses, citrus orchards, and olive groves, offering a tranquil rural lifestyle. Sóller also boasts a vibrant arts scene, with galleries, music festivals, and artisan markets. 

It's a popular destination for those looking to enjoy a peaceful, nature-filled environment while still having access to cultural and recreational activities.

Sóller: Pros & Cons

1. Beautiful natural surroundings and scenic views.
2. Rich cultural heritage and vibrant arts scene.
3. Tranquil lifestyle with easy access to both mountains and sea.
4. Limited public transportation options.
5. Can be isolated, especially in the off-season.
6. Higher costs for maintaining historic properties.

Pollensa

Pollensa, including the nearby coastal area of Puerto Pollensa, is a picturesque town that offers a perfect blend of history, culture, and natural beauty. 

The town is characterized by its narrow cobbled streets, historic buildings, and the famous Calvary Steps leading to a hilltop chapel with panoramic views. 

Puerto Pollensa, with its beautiful Pine Walk promenade, sandy beaches, and clear waters, is ideal for families and water sports enthusiasts. The area is also known for its vibrant weekly market, offering local produce and crafts. 

Pollensa attracts both locals and expatriates seeking a tranquil, community-oriented lifestyle with easy access to outdoor activities and cultural events.

Pollensa: Pros & Cons

1. Family-friendly environment with excellent beaches.
2. Rich historical and cultural sites.
3. Active local community and weekly markets.
4. Tourist influx can lead to crowded beaches and streets.
5. Limited nightlife compared to larger cities.
6. Property prices can be high in sought-after areas.

Mallorca offers a diverse and appealing lifestyle but comes with varying costs depending on the area and lifestyle choices. Below is a brief overview of the cost of living in Mallorca, covering key aspects like housing, utilities, food, transportation, healthcare, education, and entertainment.

Housing

Housing costs in Mallorca can be quite high, particularly in popular areas such as Palma, Port Andratx, and Sóller. Renting a one-bedroom apartment in the city center of Palma de Mallorca can range from €900 to €1,200 per month, while outside the city center, prices can be between €700 and €900. For those looking to buy, the average price per square meter in the city center is around €3,500 to €5,000, while outside the center, it can range from €2,500 to €3,500.

Utilities

Monthly utility costs, including electricity, heating, cooling, water, and garbage collection, for an 85m2 apartment, average around €150 to €200. Internet services add another €40 to €60 per month

Food and Dining

Groceries for one person can cost around €200 to €300 per month. Eating out varies widely, with a meal at an inexpensive restaurant costing about €12 to €15, and a three-course meal for two at a mid-range restaurant costing around €50 to €70. Basic groceries such as milk (€1.10/liter), bread (€1.36), and eggs (€3.99/12) are moderately priced.

Transportation

Public transportation is affordable and efficient, with a monthly pass costing around €40. Gasoline prices are approximately €1.73 per liter. Owning a car involves additional costs such as insurance and maintenance, which can be significant.

Healthcare

Mallorca offers high-quality healthcare services. Public healthcare is accessible, but many expatriates opt for private health insurance, which can cost between €50 and €150 per month depending on the coverage.

Education

Public schools are free, but private and international schools can cost between €6,000 and €15,000 per year. The quality of education in these institutions is generally high.

Entertainment and Leisure

Mallorca has numerous entertainment options. Gym memberships cost around €40 to €60 per month, and cinema tickets are about €8 to €10 each. Dining out and enjoying the island's nightlife can vary significantly in cost but are generally more affordable than in major European cities.

The process for buying a property in Mallorca is no different than anywhere else in Spain. We provide a detailed step-by-step guide on the process in our article: buying property in Spain. 

In the simplest of terms, once your offer is accepted by the seller, you need to sign a private purchase contract with all the purchase conditions. A deposit is typically required to take the property off the market. If you have hired a lawyer, he/she will be able to carry out the due diligence prior to signing the purchase contract. 

Once the private contract is signed, the next step is to arrange an appointment with a Public notary to sign the purchase deeds, then you pay the balance of the purchase monies and property possession is then transferred to the purchaser.

While this is a very simple overview, it is worthwhile to review the pitfalls of buying property in Spain and great care must always be taken to avoid costly errors.

To be able to buy a property in Spain, a tax identification number, or Spanish NIE number, is required. It is also advisable to set up a bank account in Mallorca, where you can transfer the purchase monies to before the signing of the public deeds of purchase.

Typically, the buyer pays a deposit of 10% of the property value to the seller, at the time the pre-purchase or 'arras' contract is signed. The 'arras' is effectively a 'contract-to-contract' and it stipulates how much will be paid for the property and the date that the purchase must take place by.

Care should be taken and advice sought before signing this contract. For example, a deposit paid under an 'arras' contract should not be confused with a request from a real estate agency to pay a reservation fee. 

In fact, this fee is usually held by the agency in lieu of payment by the seller of the agency's fee, and guarantees the buyer precisely nothing in terms of withdrawing the property from the market.

As a result of Decree Law 03/2022, passed by the Balearics Parliament, a moratorium has been declared to prevent any further touristic licences being issued, including to Mallorca properties, for the next four years. This means that, unless the property you are buying already has had a touristic license issued, you will not be able to offer the property for holiday rentals.

Should you decide not to go ahead with the purchase after signing the private purchase contract or option contract, please note you will lose the deposit. Likewise, if it is the seller who withdraws from the contract, they need to refund double the deposit received from the purchaser.

Yes, you can. You may appoint a lawyer or legal representative who can have all the relevant documents signed by you, with your presence on the island not being required. A Power of Attorney is mandatory in these cases.

On top of the agreed purchase price, there are a few additional costs that the buyer must pay when buying a property in Mallorca. 

There is an 8-11% purchase tax (stamp duty) which varies depending on the purchase price. If the property is a new brand one bought directly from the developer, then there are two taxes: 10% VAT and 1.5% stamp duty (AJD). See more information in property taxes in Mallorca. 

As when investing in a property elsewhere in Spain, you must also consider the notary fees and property registry fees, which again depend on the purchase price. 

In total, taxes and professional fees usually sum up to around 10-12% of the purchase price, including your legal fees, normally in the region of 1% of the purchase price plus VAT.  Just as would be the case in the UK, you will want to be be aware of the annual property tax payable in the area as well as any community charges also paid annually, if living in an urbanisation.

If the seller is a non-resident in Spain, then 3% of the purchase price must be paid directly to the tax authorities by the purchaser. Such tax payments should be handled by your solicitor

The property seller typically pays the Capital gains tax. the Spanish “plusvalia”, and the real estate agency fees.

Sometimes these are relatively minor issues that are resolvable easily enough - once you are prepared to wade through the infamous local bureaucracy! However, other problems are much more serious, and I have seen some unfortunate people being ruined financially by an ill-informed house purchase in Mallorca.

Below I have laid out some tips on avoiding some typical problems that tend to arise when buying property in Mallorca as well as other more important matters to consider, that must be taken care of before proceeding with the exchange.

1. DO ensure that the house complies with all the local planning regulations. It is not unusual to find in Mallorca houses, outbuildings, pools, porches etc… built without the required municipal licences, which can represent a serious issue for the potential buyer - such measures that could be taken by the authorities range from a ban on renovating the house or to do any more works on it, to a huge fine or even a demolition order.
2. DO request an inventory of furniture and a snagging list. If the house is sold furnished and, in particular, if you are paying extra for this, then our advice is that you request a detailed inventory of all the items that will be sold with the house. Likewise, and since properties are often sold as seen, we strongly recommend that all our clients get the house inspected by a surveyor so that this professional can ensure that it is in good condition and/or can draft a snagging list for any defects that should be fixed before the purchase -i.e., stains of humidity, broken tiles, a/c not working properly etc.…
3. DO request a “Nota simple” or Land Registry certificate. A land registry certificate is a document issued by the land registry where the house is registered. It not only contains a description of the house or the land where it is built on, but also a list of the mortgages and charges attached to it.
4. DO inspect the house one more time before the purchase date. This is highly advisable. Although real estate agents often offer this service at no cost to the buyer, since they are mostly paid by sellers, it is always a good idea to confirm with them, directly or through your Spanish solicitor “abogado” that the house is sold in the same condition as when you visited it.
5. DO NOT pay any money or deposit in advance before due diligence and before the signing of a deposit/option contract, including all purchase conditions. During many years of practice as a lawyer, I have seen people often advancing money to the vendor “to secure the house” before even knowing its condition or charges that might be attached to it, or before having reached an agreement on the final purchase price. It is also highly advisable to have the deposit transferred into an escrow* account, with most of the Public Notaries in Mallorca providing this service for a small fee.
6. DO NOT buy a house for which a mortgage is required before your loan has been approved by your bank. When a mortgage is required to complete a purchase, we strongly recommend signing an option contract subject to mortgage approval, so that the purchaser may recover the deposit or withdraw without penalty in case that for some reason the mortgage application does not go through. We also recommend exploring your financial options with your bank to have all the information that is required before considering buying property in Mallorca.
7. DO NOT assume that any real estate agent involved in the conveyance will work for you or will assist you throughout the whole purchase process. Whilst most of the real estate agents in Mallorca are experienced professionals and know the market and the sales/purchase process very well, and they normally do not mind giving the buyer some advice, they are usually instructed by vendors. So, if you are not the vendor, if you do not have an estate agent working for you exclusively, and if it is the first time that you are carrying out a property purchase Mallorca, we strongly recommend that you use your own solicitor on the island.
8. And finally, DO NOT sign any document that has not been previously translated to a language that you understand. Note that English is not an official language in Spain, so the vendor is not obliged to translate any contracts or documents produced in Spanish or in Catalan (also known in its Balearic version as Mallorquin) into other languages.

Is it worth buying property in Mallorca?

Investing in property in Mallorca can be a wise decision. The island's property market is robust, with high demand from foreign buyers, particularly for luxury villas and apartments. Despite high prices, which are among the highest in Spain, the allure of Mallorca’s lifestyle, climate, and amenities continues to attract investors. The rental market is also strong, driven by tourism. However, potential buyers should navigate legal requirements, such as obtaining a Spanish NIE number and understanding local regulations to avoid potential pitfalls.

Can foreigners buy property in Mallorca?

Yes, foreigners can buy property in Mallorca. The Spanish government encourages foreign investment, making the process straightforward. However, due to recent protests by locals about over-tourism and its impact on their quality of life, it's important to consider these sentiments. If you plan to buy a holiday let, legal assistance may be necessary to navigate regulations. Buying property in Spain as a foreigner is simple, but awareness of local issues is crucial.

What are the taxes on buying property in Majorca?

1. Value Added Tax (IVA): 

   1. 10% for residential properties, including up to two garage spaces
   2. 21% for land bought from commercial companies and commercial properties.

2. Property Transfer Tax (ITP): 

   1. 8% to 11% depending on the property price.

3. Additional Costs: 

   1. Notary fees 
   2. Land registry fees 
   3. Legal fees

Are property prices falling in Mallorca?

Mallorca property prices remain high and continue to grow annually, despite increased inflation and the European energy crisis. The island's appeal and strong demand from foreign buyers contribute to this trend. While prices have not fallen, the market remains attractive for investors due to Mallorca's desirable lifestyle and stable property market.