Second Home Buyers In Mallorca Warned To Plan Carefully If Rental Income Important
For those buying in the Balearics, there are strict legal requirements in place when it comes to renting out their properties to tourists
The Balearic Islands are known across the world for their spectacular beaches, but there is far more to these enchanting islands than their soft, golden sand. The largest island, Mallorca, draws in hordes of visitors every year, many of them returning time and again to create a wealth of treasured memories. The island is haven for cycling, yoga, wellness, paddle-boarding and more, as well as offering some exceptional wine tours.
We asked AIPP Members and Mallorca experts Fastighetsbyrån to provide us with their insights into why property in Mallorca is a great purchase choice and what the new rental restrictions mean.
Visitor numbers to the Balearics have been rising steadily in recent years, from 9.2 million international visitors in 2010 to 12.99 million in 2016, according to Statista. Each of the islands has its own distinct personality and attractions, and visitors often fall for one island in particular.
Must-sees on Mallorca include the stunning Palma Cathedral and the famous Caves of Drach. There is a superb range of restaurants and an excellent nightlife offering. Then there are the magnificent beaches and the accompanying watersports, with Mallorca being home to a wealth of gorgeous coastal playgrounds.
Many of those who visit a holiday destination repeatedly seek to purchase a second home there. For some, it is a property purely for their own use. For others, it is an investment, to be rented out as holiday accommodation. And of course, some buyers opt to rent their property out some of the time and use it themselves on other occasions.
For those buying in the Balearics, there are strict legal requirements in place when it comes to renting out their properties to tourists. These laws are designed to limit the number of holiday rental properties in the islands and to reduce instances of fraud in relation to holiday accommodation. They are also an attempt to control soaring rents in some Balearic locations.
The city of Palma de Mallorca is particularly strict when it comes to rental licences. The local government has banned tourist apartments across the city. Those renting out such a property without a licence could be liable for a fine of between €20,000 and €40,000. The only exceptions are single (detached) family homes in very specific areas and a few ‘horizontal properties’ (similar to condominiums).
These local laws mean that second home buyers need to plan carefully if they wish to rent their property out as holiday accommodation. Doing so is not impossible, but it’s not necessarily easy either, depending on the kind of property and its location. Buyers should remember too that local elections can have an impact on rental licensing laws (the next Balearic regional election is due before 23 June 2019).
Nevertheless, it is still legal to rent out your property in the Balearic Islands when you don’t use it yourself. You just have to prove that it is not a “holiday rental.” This means that the rental period has to be for more than 31 days and must include an official rental contract. In addition, you cannot provide linen or cleaning services as part of the rental arrangement. You also cannot advertise the property on the web portals normally used for touristic apartments.
The regulations are complex, particularly for those who are unfamiliar with their history and the language they are published in. That’s why buying through experts with sound local knowledge – like the team at Fastighetsbyrån Overseas – is so important when buying a Mallorca holiday home.
Our thanks to Fastighetsbyran for this article and images
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