Mallorca Property Investment Guide 2026 | Balearic Islands
Mallorca property investment: 29.86% foreign-buyer share in the Balearics, ITP 8–11.5%, NRIT 19%/24%, Palma STR ban on apartments, and regional price data.
By MORE Group Experts · Updated June 15, 2026 · 9 min read
Quick Answer: Mallorca offers 29.86% foreign-buyer share in the Balearics (2025), progressive ITP resale tax of 8–13%, long-term gross yields of 4–5.5%, and a complete STR apartment ban in Palma. Licensed villa rentals operate under strict municipal quotas. The Golden Visa property route closed 3 April 2025.
Mallorca is the Balearic Islands’ largest and most liquid property market. The Illes Balears recorded a foreign-buyer share of 29.86% in 2025, nearly one-in-three residential transactions completed by an overseas buyer, against a national average of 13.82%. Prices range from under €200,000 for inland village houses to over €15,000 per square metre for southwest coast villas. Rental yields on long-term leases average 4–5.5% gross, broadly aligned with Spain’s national Q1 2026 figure of 5.45% (Global Property Guide), but short-term rental regulation has tightened sharply, and Palma bans all tourist rental activity in apartments.
Why Is Mallorca a Strong Property Investment Market in 2026?
Mallorca consistently attracts international capital because it combines three structural drivers that few Mediterranean islands can match simultaneously: a large, diversified buyer pool, a year-round economy sustained by both tourism and resident demand, and a constrained land-supply environment that supports capital values. Spain recorded 714,237 residential transactions in 2025, up 11.5% year-on-year, the strongest annual volume in over a decade, and the Balearic Islands outperformed the national trend. Foreign buyers completed roughly 97,480 purchases across Spain in 2025, representing 13.82% of total volume; in the Balearics that proportion reached 29.86%, meaning that nearly one-in-three buyers came from outside Spain. That foreign-buyer depth is the key liquidity metric that separates Mallorca from most Spanish provincial markets: when an investor decides to exit, the buyer pool is German, Scandinavian, British, Belgian and Swiss, not just local. Transaction volume in the Balearics has remained structurally elevated since 2020, driven in part by post-pandemic relocation demand and remote-work capital that relocated to premium southern European markets. Mallorca benefits from Palma Airport, which handles direct flights from over 30 countries, reducing the friction that constrains competing island markets.
Considering a Mallorca property investment? Request a free consultation from MORE Group experts, our team works directly with verified Spanish lawyers and licensed agents on the island.
What Are Property Prices Across Mallorca’s Regions?
Mallorca divides into four broad investment zones, the Southwest Coast, Palma city, the North and Northeast, and the East and Southeast, each with distinct pricing, yield dynamics, and buyer profiles. Understanding this geography is essential before committing capital, because the right zone depends on whether your priority is capital appreciation, rental income, personal use, or exit liquidity.
The southwest corridor, anchored by Andratx, Port Andratx and Camp de Mar, holds the island’s highest per-square-metre values for luxury villas. Entry for a quality detached property begins around €1.2 million in this zone. Palma de Mallorca combines urban convenience with stronger long-term rental demand from residents and professionals, but the STR ban on apartments fundamentally limits short-term income potential. The north, Pollença, Alcúdia, Sóller, offers the most accessible entry points for licensed tourist villa investment, with a strong family and cultural tourism demographic that extends the seasonal rental calendar into May and October. The east coast around Santanyí, Felanitx and Cala d’Or sits at a mid-point: more affordable than the southwest, but with growing demand from buyers priced out of premium zones.
Mallorca Property Price Reference Table (2025–2026)
| Region | Key Zones | Avg Price (Apartment) | Avg Price (Villa) | Entry Point |
|---|---|---|---|---|
| Southwest Coast | Andratx, Port Andratx, Camp de Mar | €5,500–€9,500/sqm | €7,000–€15,000+/sqm | from €1.2M |
| Palma City | Old Town, Santa Catalina, Son Armadams | €3,200–€6,500/sqm | €4,500–€8,000/sqm | from €280,000 |
| North & Northeast | Pollença, Alcúdia, Sóller, Puerto Pollença | €2,500–€4,800/sqm | €3,500–€6,500/sqm | from €220,000 |
| East & Southeast | Santanyí, Felanitx, Cala d’Or, Manacor | €2,000–€4,200/sqm | €2,800–€5,500/sqm | from €180,000 |
Figures are indicative market ranges based on advertised transactions; individual properties vary materially. Always commission an independent RICS-aligned tasador valuation.
Ready to compare specific properties across Mallorca’s regions? Talk to a MORE Group property specialist who can shortlist licensed villas and high-yield long-term assets.
How Do Short-Term Rental Regulations Work in Mallorca?
Mallorca’s short-term rental (STR) regime is among the strictest in Spain, and buyers who ignore this risk purchasing an asset that cannot legally generate the income they projected. Palma de Mallorca enacted a complete prohibition on STR in apartments and multi-family buildings in 2018, which has been upheld and reinforced since. Only detached houses and villas with a valid Estancia Turística (ET) licence may rent short-term in Palma, and even those are subject to a municipal quota that was full as of early 2026. In practical terms, a newly purchased Palma apartment cannot be let on Airbnb, Booking.com or any short-term platform under any circumstances, this is not a processing delay but a structural legal bar. Outside Palma, the situation is more nuanced but equally demanding. Calvià (which includes Magaluf, Santa Ponsa and Peguera) operates a municipal STR quota that is currently closed to new applications in most zones. Andratx and Pollença maintain active licensing registers but require that the property appears on the cadastral register as a detached residential property, not a multi-unit block. Properties in inland municipalities such as Sineu, Petra and Montuïri face fewer restrictions, but rental demand in those locations is structurally lower than coastal zones. For investors targeting STR income, the due diligence checklist must include: confirmation of property classification on the Registro de la Propiedad, a review of the current municipal STR quota and waitlist status, and a lawyer’s opinion on whether the specific property is eligible for an ET licence before exchange.
What Taxes Apply to Mallorca Property Investors?
Mallorca applies the Balearic Islands’ tax regime, which is materially more progressive than Andalucía’s flat 7% ITP rate for resale transfers. Understanding the full tax stack before exchange is non-negotiable, as acquisition costs alone can reach 14–18% of purchase price depending on property type and value.
Resale properties (ITP): The Balearic progressive ITP schedule is as follows, 8% on the first €400,000; 9% on €400,001 to €600,000; 10% on €600,001 to €1,000,000; 11.5% on €1,000,001 to €2,000,000; and 13% above €2,000,000. A €1.5 million villa therefore carries an ITP bill of approximately €140,000 (blended effective rate around 9.3%). New build properties: Buyers pay 10% IVA (VAT) plus 1.5% AJD (Actos Jurídicos Documentados, stamp duty) on the purchase price. Additional purchase costs across both transaction types include notary fees (approximately 0.1–0.3%), land registry fees (0.1–0.2%), and legal fees (typically 1–1.5%). Total acquisition costs for a resale purchase commonly reach 12–15% of the purchase price; new build acquisitions typically cost 13–14%.
Ongoing taxes: The annual Impuesto sobre Bienes Inmuebles (IBI) is levied by the municipality and ranges from 0.4% to 1.3% of cadastral value. Wealth tax (IP) was reinstated in Spain and, in the Balearics, applies progressively from 0.28% on net assets above €700,000 per person (after a €300,000 primary residence allowance). For rental income, non-resident property owners file Modelo 210 quarterly. EU and EEA residents pay Non-Resident Income Tax (NRIT) at 19% on net rental income after allowable expenses including mortgage interest, community fees, insurance, depreciation and IBI. Non-EU nationals pay a flat 24% on gross rental income with no deductions permitted, a significant structural disadvantage for buyers from the United States, the United Arab Emirates or the United Kingdom post-Brexit. If a property is not rented, an imputed income charge applies annually at 1.1% of the official cadastral value (for properties with a cadastral value revised after 1994), taxed at the applicable NRIT rate.
Mallorca Tax Summary for Non-Resident Investors
| Tax | Rate | Basis |
|---|---|---|
| ITP (resale transfer, up to €400K) | 8% | Purchase price |
| ITP (resale transfer, €400K–€1M) | 9–10% (progressive) | Purchase price |
| ITP (resale transfer, over €1M) | 11.5–13% (progressive) | Purchase price |
| IVA + AJD (new build) | 10% + 1.5% | Purchase price |
| NRIT on rental, EU/EEA residents | 19% | Net income |
| NRIT on rental, non-EU residents | 24% | Gross income |
| Annual IBI | 0.4–1.3% | Cadastral value |
| Wealth tax (IP, over €700K net) | 0.28%+ progressive | Net asset value |
The Golden Visa property route was closed on 3 April 2025 under Organic Law 1/2025. Property investment in Spain no longer qualifies as a basis for residency or visa applications under any threshold.
How Do Mallorca’s Regions Compare for Investors?
Each of Mallorca’s four main zones serves a different investor profile. The comparison below uses five key factors: entry-level price, indicative gross yield for permitted rental activity, STR licensing feasibility, dominant buyer nationality, and primary investment rationale.
| Factor | Southwest (Andratx) | Palma City | North (Pollença) | East (Santanyí) |
|---|---|---|---|---|
| Entry price (villa) | from €1.2M | from €600K | from €380K | from €280K |
| Entry price (apartment) | from €550K | from €280K | from €180K | from €150K |
| Long-term gross yield | 3.5–4.5% | 4.5–5.5% | 4–5% | 4–5% |
| STR licensing (apt) | Not permitted | Prohibited | Very limited quota | Limited quota |
| STR licensing (villa) | Active but quota-dependent | Active (quota full) | Active, waitlist | Active |
| STR gross yield (licensed villa) | 5–7% | 4–6% | 6–8% | 5–7% |
| Dominant buyer nationality | German, Swiss, Belgian | German, British, Scandinavian | British, German | British, German |
| Primary investor rationale | Capital preservation, lifestyle | Long-term rental, urban capital growth | Yield, family rental | Accessible entry, capital growth |
| Liquidity on exit | Very high | High | Moderate–high | Moderate |
What Are the Honest Pros and Cons of Mallorca Property Investment?
Mallorca’s strengths as an investment destination are structural and well-documented, but the market also contains real risks that developer brochures tend to omit. A balanced assessment requires examining both before committing capital.
Strengths
Foreign-buyer depth and liquidity. A 29.86% foreign-buyer share in the Balearics means that Mallorca’s secondary market is genuinely international. When an investor exits after seven or ten years, the buyer pool includes German, Scandinavian, British and Belgian households with significant purchasing power, reducing the risk that a sale will require a price discount to find a local buyer.
Constrained land supply. Mallorca has a protected natural area regime, approximately 40% of the island is classified under environmental protection laws, which structurally limits new supply in premium coastal and rural zones. This is a meaningful support for resale capital values in licensed villa markets where new stock cannot easily be added.
Macroeconomic momentum. Spain’s national transaction volume rose 11.5% in 2025 to 714,237, the strongest annual figure in more than a decade. The Balearics have consistently outperformed the national trend since 2020, supported by remote-work demand, retirement migration from northern Europe, and the absence of an oversupply cycle comparable to 2006–2008.
Long-term rental demand. Palma has a growing tech and professional services economy, and long-term residential rental demand from workers relocating to the island supports yields of 4.5–5.5% on well-located apartments, without any exposure to STR licensing complexity.
Risks and Drawbacks
STR regulation is permanently restrictive. The Palma apartment STR ban is not temporary or under review, it is codified municipal policy backed by regional tourism law. Investors who purchase Palma apartments expecting Airbnb income will find no legal pathway to short-term rental activity, and the risk of regulatory tightening elsewhere on the island (particularly in Calvià and Alcúdia) remains real.
Progressive ITP creates a high acquisition cost floor. A €1.5 million villa in Andratx generates an ITP bill of approximately €140,000 before legal, notary and registration fees. Combined with purchase costs, an investor in this bracket commits roughly €200,000–€220,000 in non-recoverable transaction costs before the property generates any income, a significant drag on short-to-medium-term return calculations.
Non-EU buyers face a structural yield penalty. The 24% NRIT rate on gross rental income (with no expense deductions) for non-EU nationals, including post-Brexit UK buyers, materially reduces net yields versus EU/EEA investors paying 19% on net income. A property generating €40,000 gross rental income costs a UK buyer approximately €9,600 in NRIT versus €5,600–€7,000 for a German buyer on the same asset.
The Golden Visa property route is closed. Since 3 April 2025, purchasing real estate in Spain, at any price point, does not confer residency rights for non-EU nationals. Investors who planned to combine a property purchase with a Spanish residence permit must now pursue alternative visa categories (Digital Nomad Visa, Non-Lucrative Residence Visa, or entrepreneur routes), each with different income and presence requirements.
Seasonal concentration in STR markets. Licensed villas that depend on tourist rental income face occupancy heavily concentrated in June through September. Gross yields quoted for these properties often assume near-full occupancy in those four months. Achieving the headline yield requires active professional management, competitive OTA positioning, and a property condition that justifies premium nightly rates, none of which is guaranteed.
Is Mallorca Property a Good Investment in 2026?
Mallorca represents one of Europe’s most structurally sound premium coastal markets for capital-preservation-oriented investors, particularly for those with a medium-to-long hold period of seven years or more. The 29.86% foreign-buyer share in the Balearics is the clearest available signal of market depth and exit liquidity. Spain’s national transaction volume growth of 11.5% in 2025 confirms that the macro cycle continues to support values, and constrained coastal supply in Mallorca’s southwest and north provides structural support for premium villa pricing that is absent in markets with unrestricted development. For yield-maximising investors, the calculus depends heavily on zone and property type. Long-term rental in Palma (4.5–5.5% gross) offers a clean, regulation-compliant income stream. Licensed tourist villas in Pollença or the northeast can achieve 6–8% gross during peak season, but net returns after tax, management and costs are more realistically 3–4.5%. Non-EU investors should model the 24% NRIT gross rate explicitly, as it materially changes the net return versus EU buyer assumptions. The key due diligence questions for any Mallorca investment in 2026 remain: Does this specific property have an existing tourist licence, or is one legally available? What is the realistic occupancy scenario and net yield after NRIT and costs? And what does the exit market look like for this property type in this municipality in seven to ten years?
For a detailed comparison of Mallorca versus Spain’s mainland premium markets, see our Mallorca vs Marbella comparison and the full Balearic Islands property investment guide. Before you exchange contracts, review the cost of buying property in Spain, the Spain rental yield guide, and the foreign buyer step-by-step process.
Frequently Asked Questions
Long-term residential rentals in Mallorca typically generate gross yields of 4–5.5% annually, broadly in line with Spain's national Q1 2026 average of 5.45% (Global Property Guide). Short-term tourist rentals in licensed villas in premium zones such as Andratx or Pollença can yield 6–8% gross during peak season, but net yields after management fees, maintenance and NRIT are significantly lower, typically 3–4.5% for EU/EEA residents and lower still for non-EU buyers subject to the 24% gross-income NRIT rate.
Yes. EU and non-EU nationals may purchase residential property in Mallorca without ownership restrictions. Non-EU buyers require a NIE (Número de Identificación de Extranjero) and must comply with Spanish anti-money-laundering requirements on fund transfers. Note that the Golden Visa property route was closed on 3 April 2025 under Organic Law 1/2025, so purchasing property no longer grants residency rights for non-EU nationals regardless of purchase price.
Mallorca applies the Balearic Islands' progressive ITP rate: 8% on the first €400,000; 9% on €400,001–€600,000; 10% on €600,001–€1,000,000; 11.5% on €1,000,001–€2,000,000; and 13% above €2,000,000. New build purchases pay 10% IVA plus 1.5% AJD stamp duty. Total acquisition costs including legal, notary and registry fees commonly reach 12–15% of purchase price for resale transactions.
No. Palma de Mallorca prohibits short-term tourist rentals in apartments and multi-family buildings entirely. Only detached houses and villas with a valid Estancia Turística licence may operate legally, and even those are subject to strict municipal quotas that were at capacity as of early 2026. Buyers expecting Airbnb-style returns from a Palma apartment will not receive a tourist licence, this is a permanent regulatory prohibition, not a temporary processing issue.
Non-resident property owners pay Non-Resident Income Tax (NRIT) via Modelo 210. EU and EEA residents are taxed at 19% on net rental income, after deducting allowable expenses including mortgage interest, community fees, insurance and depreciation. Non-EU nationals (including post-Brexit UK buyers) pay a flat 24% on gross rental income with no expense deductions permitted. If the property is not rented, an imputed income charge of 1.1% of the official cadastral value applies annually, taxed at the applicable NRIT rate.
Mallorca offers broader market depth, a wider price range (from €180,000 for east-coast apartments to over €15,000/sqm for southwest villas) and easier access via Palma Airport, making it more liquid on exit than Ibiza. Ibiza commands higher price-per-square-metre in trophy locations such as Santa Eulàlia and Es Cubells, but the buyer pool is narrower and STR licensing is equally restricted. For yield-focused investors, Mallorca's northeast and east offer better entry-to-yield ratios; for capital preservation in ultra-premium assets, Ibiza's southwest outperforms. The Balearics as a whole recorded a 29.86% foreign-buyer share in 2025.
Get a Spain property shortlist
Tell us your budget and market (Costa Blanca, Costa del Sol, Balearic Islands). We reply within one business day with options matched to your goals.