Touristic rentals in Mallorca and the Balearics: the new position

Holiday home in Mallorca

Holiday homes in Mallorca

By Will Besga, Mallorca Law.

I have written extensively in the past about touristic rentals under the previous regulatory framework (the 2012 Touristic Act), and the constraints it imposed on these types of rentals. With the new Touristic Act, there is yet again much to say, and there is also a certain sense of urgency to do so. Indeed, touristic rentals are vital to Mallorca and to its property owners and, as always, there are many questions and misinformation about this important issue.

With this in mind, I will endeavour to shed some light into what has changed from the previous position, where we are, and where we are heading.

To recap on the previous law

The previous Touristic Act allowed for the concession of touristic licenses to detached houses, semis, and town houses. Flats and terraces were passed over for licenses, and touristic rentals were not allowed in them. For more information on the previous law see my article of April 29th 2013 Tourist rental licences in the Balearics explained.

This lead to the believe by many that short term rentals could not be conducted in flats, although a distinction should be made between ‘short term rentals’ and ‘touristic rentals’ per se: the former could and still can be conducted in flats, although under certain circumstances and with certain important limitations (more on this another time).

On the 1st of August 2017, the new Touristic Act came into force. So what has it done?

The new regime

The most immediate consequence of the new law is that it suspended the concession of new licenses as of the 1st of August last year, ie, from the moment it came into force. This means that all those properties with licenses obtained or validly submitted before the 1st of August, 2017 (which were only for detached houses, semis or townhouses), will be able to keep them (as long the applications were done properly), and to continue with the activity.

The freeze on new licenses will remain until the authorities divide Mallorca and the other islands into several different types of zones. Each zone determines whether touristic rentals can take place within a given area, and if so, what types of properties are allowed to conduct such activity.

Indeed, the new law provides that all types of properties, now also including flats and terraced houses (hitherto banned from obtaining licenses), as well as detached houses, semis and townhouses (which were the only types of properties allowed under the previous legislation), will be able to obtain touristic licenses, but, crucially, as long as they sit in an area capable of sustaining touristic rentals for that type of property, and, in addition for flats and terraced houses, as long as the community of owners formally allows touristic rentals in their communities.

In sum: whilst the new law will potentially allow all types of properties to conduct touristic rentals, not all parts of Mallorca will be able to accommodate them. The restrictions will not be based on property type, like before, but on the area where the property is.

The types of zones

The islands’ governments have provisionally arranged the surface area of all of the islands according to seven different zones, which have the following restrictions:

  • Exclusion zones (small areas scattered around the island), where no touristic rentals, of any kind, are permitted.
  • Rural protected areas, where no touristic rentals, of any kind, are permitted.
  • Rural common land, where rentals are permitted in detached houses, and also for 60 days within a given year on any kind of property as long as it is the owner’s permanent residence. No touristic rentals permitted in flats.
  • Population centers in the interior, where touristic rentals are permitted across the board.
  • Population centers in the interior with intense touristic pressure, where only 60 days are permitted within a given year on any kind of property as long as it is the owner’s permanent residence.
  • Coastal areas where touristic rentals are permitted across the board.
  • Coastal towns with heavy touristic pressure, where only 60 days a year touristic rentals are allowed for any kind of property as long as it is the owner’s permanent residence.

The provisional assigning of zones that has been made is very onerous, restricting touristic rentals in some key coastal and interior towns. This zoning has been subject to a period of consultations and reports from the all the council areas; this consultation is now over. Some of the councils have protested the restrictions whilst a few others, rather surprisingly, have protested in the opposite direction, arguing in favor of the banning of new licenses in their council areas. The authorities have now until the end of July to settle and publish the definitive zoning of Mallorca.

The capital city of Palma, which is also, like the rest of the Balearics, under the suspension of new license concessions, was given the faculty to determine its own regulation of touristic rentals. On April 26th, Palma proposed to ban new licenses for all flats and terraced houses, as well as detached houses in rural settings, therefore only allowing touristic rentals in detached houses sitting on urban land. The final decision must also come by the 31st of July.

Conclusions and looking ahead:

Whilst the new law introduces important restrictions based on area, not all is doom and gloom:

  1. Flats and terraces can now potentially be rented out touristically, as long as they are in areas classed as apt for it, and the community of owners allow such rentals. This is a welcome change from the previous banning of these types of properties, and many will benefit
  2. If the final zoning is not settled and published by the 1st of August, there will be a period in which the regional tourism department will be compelled to grant new licenses, but only for detached, semis and town houses (i.e., the types of properties allowed under the previous touristic Act). It is possible that this situation will take place, so watch this space, particularly if your property is in an area where rentals will be restricted.
  3. A less restrictive final zoning? In this sense, it is worth noting that Mallorca’s very restrictive, provisional classification, was passed with 16 votes in favor and 15 against, which shows that there is a real political division surrounding the new law and its consequences. It is therefore possible that the island authorities will make a more permissible zoning, given the bipolar division around these issues and the opposition of most councils to the provisional zoning that has been made. We will have to wait and see.
  4. Short term lets and touristic lets: Just like under the previous law, the Spanish Tenancy Act allows for the renting out, in principle for any period of time, of any type of property. Because there is a regional law regulating touristic rentals, extreme care must be taken in ensuring that the short term rental does not fall within the touristic rentals’ parameters, which effectively means that ‘short term lets’ can be done under certain limiting conditions. This will form the subject of another article.
  5. 60 day lets: you will have realized that there is a new modality of touristic lets, those conducted for a maximum period of 60 days in any given year, as long as it is your habitual residence. These types of rentals will be able to be done (once the concession of licenses resumes) in all geographical areas of Mallorca except in exclusion zones, protected areas, and within the council of Palma.

It is apparent that the new law has generated a framework that it is still in flux. It will take time, as well as further regulations which will be needed to provide definition to the law, until we know exactly what the final situation is, and what the do’s and don’ts are.

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About Will Besga - Mallorca Law

Spanish qualified lawyer Will Besga studied at The University of Queensland (Australia), The University of Manchester (UK) and The College of Law (UK), and now heads Mallorca Law, a full-service law firm located in Palma de Mallorca. He can be reached by email sent to will.besga@mallorcalaw.com