Category Archives: Property Works Mallorca Surveyor’s Blog

2026 Mallorca property buying guide

Property Works Mallorca has developed a simple guide to follow when considering a purchase in Spain.   We hope this is of some use. This is not intended to replace any advice given by your lawyer, so make sure you appoint a good one. The information outlined below is to guide you only and should not be relied on. 

 

We suggest you contact us immediately so we may offer independent support and assistance throughout the purchasing process.

Happy house hunting!

1. Consider your budget

In our view, the first step you should take prior to purchasing is to discuss finance options with both UK and Spanish Banks.  Due to restrictive mortgage finance available and strict credit control you should identify how much bank finance is available and if a purchase is viable.

Please make sure finance is in place and approved prior to entering into a purchase agreement. Many deposits are lost because verbal approval is given by the banks, prior to them carrying out their own due diligence.

The purchase costs in Spain are very high. We recommend you allow at least 15% of the agreed figure. If you are selling one property in Spain and buying another, costs can get close to a whopping 20% if agency fees are included.

Taxes will vary depending on your resident status and the vehicle used for purchase.  We recommend you consult a “Gestor”  (a specialist in Spanish taxes and bureaucracy) or a Spanish accountant prior to purchase.

We highly recommend you do not overstretch yourself by risking your main house or savings.

2. Consider the area

Without stating the obvious, it is vital to get the area right.

Various aspects should be considered; everything from transport, to amenities, leisure, schools, distance to the shops, the beach etc.

You should also look at negatives such as local existing and future planning, road noise and distances from airports. Busy bars and restaurants may seem a fun place to be when you are out during the evening, but living close to busy nocturnal areas can be a nightmare.  

Make sure you visit more than once and ideally in different seasons.  Come to the area you are interested in and have a good sniff around. Spend a good couple of weeks over here, looking at the area you might like to be in and comparing it to others. Talk to locals, do research via the internet etc.

3. Consider what type of property you require

Make sure you buy the property that suits your needs.

Again, this may seem obvious, but we have seen this fundamental advice ignored time and time again.

  • Do consider if you want to primarily be with Spanish, German or English communities.
  • Consider if the area is seasonal and how that may affect your enjoyment of the area.
  • Don’t buy a house in a remote village if you are sociable, cannot speak the local language and don’t drive.
  • Don’t buy a large property that requires constant maintenance if you don’t enjoy the hassle and costs.
  • Don’t consider a property with lots of land if you are not going to be at the house for long periods or aren’t prepared to pay for maintenance.
  • Ensure travel times from your home are not excessive and that flights are likely to be ongoing and throughout the year. 
  • Draw up a shortlist of properties. 

4. Identifying a good estate agent or home finder

A good estate agent is likely to help no end. Even better, consider a property finder.

A bad agent will drive you mad, may feed you false information, cost you money and/or lose a purchase.

When choosing, consider the time they have been on the island, the languages they speak, the time they have spent with their company, the areas they cover and their general attentiveness. If you are considering a cheaper property, it might make sense to go with a smaller agent, who will be grateful for the fee.

Get as much info on the properties you are looking at before visiting

Remember agents do not work for you (the vendor pays their fee) and they should not cost you money.

These days, the internet is a fantastic source of property but can be overwhelming. Take your time and create shortlists.   

Don’t get carried away. Having viewed lots of properties, some agents are very good at sitting potential purchasers down on a nice terrace with a sea view to enjoy the wine and evening sun, buttering them up before signing a contract. Buy sober and with a cool head. 

We are happy to recommend various local agents who we have working with over the years.

Property Works can also help by providing a high-quality home finding service.

5. Making an offer

Firstly, take advice from your lawyer/agent about how to make the offer.

Getting some info from the agent about the vendor’s situation is always a good idea.

This should be carried out at an early stage in order to help with the negotiations.

The vendor’s position is crucial when forming the offer and getting the best deal but be warned, Some vendors will not negotiate or offer very little margin to negotiate, even if it is a fair offer.  

A formal survey and valuation document is then recommended. This can easily save you thousands when negotiating a purchase.

Vendors attitudes and circumstances will vary considerably and your approach to making an offer should be flexible. It may be that vendor is wealthy or is dire straits; it may be that they are Mallorquin or German and consider your bartering offensive.

We suggest 1) a verbal offer is made, along with 2) a proposal for the process to proceed to purchase, explaining 3) how long you need to complete and 4) the logic to your offer.

6. Carry out due diligence and the paperwork

This is where your professionals really start to work for you.

When purchasing a property in Spain, it is advisable to appoint an independent lawyer to investigate important legal issues such as tenure, debt and ownership and to ensure the purchase goes through with the minimum of fuss. Our surveyors can assist in the due diligence, often working closely with your legal advisor and always acting exclusively for you as the purchaser.

We always recommend you appoint a competent, independent lawyer.

Be careful with accepting an Estate Agents recommendation for a lawyer. These lawyers may be pressured by the agent to push a sale through in order to get the next instruction.  Some lawyers, in our experience, do not have the same level of duty of care to their clients (the purchaser) as you might have experienced in other transactions.  We can help in selecting a lawyer who will work for you and you only. 

You lawyer is likely to recommend you proceed to purchase with an  “Opción de Compra” or Purchase Option. This is a contract signed by both parties outlining the terms and conditions of the sale.

It should describe:

  • The property to be sold including the building’s size and land size, neighbours, rights of way, easements, etc
  • The housing registry and deed number
  • Its rating number
  • The price
  • The vendor and purchaser’s name, id and addresses.
  • The deposit amount
  • The date of completion
  • What will happen if the contract is broken
  • Who will hold the deposit
  • the commission payable to the agent by the vendor.

Notes:

  • Use your own common sense. Approach the purchase with the same care as you would back home.
  • Consider a subject to survey clause.
  • Consider defects disclosure clause.
  • Do not confuse an  ”opción” or option with a “señal” or deposit. A señal is a small deposit, perhaps 1,000-5,000€ to hold the property until contracts are drawn up.  It has no legal status and is usually paid over a handshake. These contracts are often provided by the agents and often represent their interests or those of the vendors.
  • Do not be afraid to suggest that your lawyer will provide the option document. This is always the best option as it is more likely to favour you as the purchaser. 
  • Never sign any purchase contract unless you fully understand its content. Ensure you have an English translation.
  • The days of paying 10% deposit are gone. Try negotiating down 5%. This is much more reasonable.
  • Do not expect to get your option deposit back without a fight if the money is held with the agent, vendor’s lawyer or vendor, so make sure the money is held by a trusted third party.  If it goes to court it can take years to recover. We encourage a deposit cheque being held by your lawyer, which can easily be returned if not cashed. 
  • Do not sign an option until a minimum amount of due diligence is carried out. Most vendors can and should wait for you to check out some basic pre-purchase details. Generally, three to four weeks should be sufficient for your lawyer and surveyor to give you the green light to proceed. 
  • Remember an unprofessional agent wants your signature as soon as possible in order to claim a commission.
  • Forget paying cash for the option, however much the agent or vendor likes it. This is an antiquated and unreasonable request.
  • Consider if you are purchasing the property with furniture. This is often quite a good idea and can save many thousands of pounds. It can also help with negotiations.
  • Often the paperwork is irregular in Spain.  If this is the case, your first question to your lawyer should be can this be corrected. If not, you need to be advised as to the consequences of not correcting the paperwork (which can very can vary considerably depending on the infraction and the area) and if you can live with any irregularities.

When irregularities are found, such as an illegal extension, don’t panic. Firstly, understand if it can or cannot be corrected and try to assess any risk. If you are informed, you can then decide, with professional advice, if this is going to be important or affect your enjoyment of the property and your ability to sell in the future.

Good luck!

The €695 Shed: A Perfect Symbol of Mallorca’s Rental Crisis

In the quiet rural municipality of Maria de la Salud in Mallorca, a property listing recently appeared that perfectly encapsulates the island’s housing absurdity. The advertisement was for a basic structure on rural land—little more than a shed. It lacks a habitation certificate, relies on very basic off-grid services, and yet, it is priced at €695 per month.

For many locals, even this substandard option is a stretch too far.

If it weren’t so sad, it would be almost funny. But this listing is more than just an overpriced shack; it is a stark symptom of a system where high demand, limited supply, and the immense pull of the tourism economy have created conditions where even the most basic spaces command premium rents. It highlights, in microcosm, everything that is wrong with the Mallorcan rental market today: the urgent need for transparency, the absence of enforceable minimum habitability standards, and the profound social changes reshaping the island.

A Market in Crisis: The €400 Question

The shed in Maria de la Salud is not an isolated oddity; it is the logical endpoint of a market spiralling out of control. Mallorca is in the grip of a severe rental price crisis. Current projections for 2026 suggest that average rents across the island could rise by a staggering €400 per month. For a young local worker earning a typical salary, this increase alone could represent nearly half their monthly income, pushing the dream of independent living further out of reach.

The island, quite simply, is a victim of its own success. The advantages of living in Mallorca—the climate, the beauty, the quality of life—are finally being fully reflected in house prices. For decades, this was a hidden gem; now, the world has caught on. The resulting demand, fueled by international buyers and a booming tourist sector, has created a perfect storm that is leaving the local population stranded.

The Political Divide: Ideology vs. Reality

As the crisis deepens, the political class has begun to stir. However, the proposed solutions are deeply mixed and often rooted more in ideology than in practical, workable outcomes. The debate is essentially split along traditional lines.

On the left, the instinct is toward intervention. Proposals centre on rent controls to cap what landlords can charge, alongside a commitment to building more public social housing. The goal is to protect tenants immediately and use the state as a direct provider of affordable homes.

On the right, the focus is on freeing up the market. Their proposed remedies include increasing the flexibility of planning laws, making it easier to secure change of use for buildings (such as converting offices into residences), and offering fiscal benefits (tax breaks) for landlords to incentivise them to bring properties to the rental market.

Both sides have a point, and both sides have blind spots. Rent controls, without addressing supply, can stifle new development and lead to market stagnation. Fiscal benefits, without safeguards, can become subsidies for landlords with no guarantee of affordable rents for tenants.

Beyond Ideology: The Need for a Balanced Solution

The truth is that careful, nuanced action is required. The problem is too complex for a single, silver-bullet solution. A balanced approach must draw from both playbooks. It means combining the left’s commitment to protecting the vulnerable with the right’s understanding of market incentives.

We need planning reform that makes it easier and faster to build, but with strict guarantees that new developments include a significant percentage of affordable, long-term rental units for local families. We need fiscal incentives for landlords, but only in exchange for binding commitments to offer rents below the market rate. We need to crack down on illegal rentals and enforce minimum standards so that a shed without a habitation certificate cannot be legally let at an exploitative price.

The Silent Victims of Success

Ultimately, the debate comes down to a fundamental question: who is Mallorca for?

The island’s beauty and success have turned it into a global hotspot. But in the rush to capitalise on that success, we risk forgetting the people who make Mallorca what it is—the families, the workers, the young people. They are the silent victims of the tourism boom, pushed to the margins, forced to live in substandard accommodation, or compelled to leave the island of their birth altogether.

Caution is needed. Urgent, decisive, and balanced action is required to ensure that Mallorquin families and their children genuinely benefit from the island’s prosperity. The €695 shed is a warning sign. If we fail to heed it, the social fabric of the island will continue to unravel, one unaffordable rental at a time.

Palma Mayor to authorize the building of 1.200 social housing units

Palma City Council will build 1,200 social housing units on eight residential plots that will be social or at a 90 percent of market value. Mayor Martínez has assured that eight plots will be developed as soon as possible, also taking advantage of the housing emergency decree, which allows for increasing the density of construction or the change of use of plots to build homes. 

Martínez has warned that, “in no case, the sale of these homes to private entities is contemplated. These properties will become part of the municipal heritage”. Currently, the Municipal Housing Board has 398 homes. The idea is that they can be ready before the end of the legislature.

The Balearic Government considers limiting foreign home ownership

Iago Negueruela, Minister for tourism and industry, called for a deep debate on how to limit the purchase of homes to non-residents on the Balearic islands of Mallorca, Ibiza, Menorca and Formentera.  The islands have traditionally been a second home haven for wealthy Northern Europeans.    

This motion, along with others to reduce the population and over-construction is now being hotly debated.  Sustainability, quality of life and an accessible housing market for locals appear to be the objective, along with the prevention of the islands becoming “second home ghettos “. 

Approximately 35% of properties sold in the 3Q of 2022 were to foreigners.  This is generally in the most expensive sector, which leads to a knock-on effect on prices further down the housing ladder.  

Limitations on second homeowners in places such as Andorra, Denmark and Malta are being studied carefully. 

 

 

 

Javier Mato article on the current housing crisis in the Baleares.

An excellent article questioning the current political model. We have translated below if needed.  

https://amp.ultimahora.es/opinion/tribuna/2022/11/20/1831687/vivienda-fracaso-paliativos.html

Housing: A failure without a cure

Why is housing in the Balearic Islands totally inaccessible for a worker today?

Prices, including real estate prices, are always determined by supply and demand, which means that we are either facing an excess of buyers, or a shortage of properties, or a combination of both. This gap is quantifiable: tens of thousands of additional homes are needed. Developers are not providing them, which is their raison d’être, as a result of erroneous political decisions made over the years.

One reason is the lack of land. The Balearic Islands’ politicians compete to be the most ecological, reducing or removing buildable land – not only in protected areas, which is plausible, but also where there is nothing to protect. What environmentalism can there be in that today where between two six-story buildings in Palma, only one block of three is allowed? In addition to being foolish, it unnecessarily restricts this type of supply.

Today in Palma there is very little land left and what is available, is selling at the price of gold. As a consequence, the land costs end up adding about 800 euros more per square meter of a dwelling, one hundred thousand euros on average, with an extra forty thousand euros if a building has to be demolished. A developer recently told me that this week, he saw a plot on Calle Manacor suitable for a 19-storey development, for two million two hundred thousand euros, plus the demolition costs of the existing house.  In this case, these costs would amount to a 40% surcharge .

A second significant factor is the cost of real estate transactions in the Balearic Islands and Spain. In the case of secondhand housing, the property transfer tax was increased by the Balearic Government by almost fifty percent as a result of the 2008 crisis.  On top of that, agency and legal costs are excessive, being at a rate much more typical of an underdeveloped country with very few or cheaper transactions.  

Municipalities increase costs catastrophically while processing building permits. Although. in theory, they have a maximum of three months, in Palma they are taking around eighteen months. This uselessness is disguised as rigor. This makes housing more expensive, as there are loans and interest to pay. It is estimated that five thousand euros are added per home due to the inefficiency.  Building a property can involve up to five layers of administration,  all slow and complicated, making everything more expensive.

Another factor is the absence of social housing. For about ten years, practically no developer has built social housing, simply because the Balearic Government has insisted on applying unfeasibly low prices (1,940€ per square meter in Palma, now slightly improved, but still insufficient). The politicians’ intentions look very nice in their initial manifesto, but as they are not realistic and there has been no cooperation, the result is that new social housing built by private developers has almost disappeared. 

There is state-promoted council housing, but it is better not to talk about this as there is so little.  Of course, the designs appear in architecture magazines, which is not exactly the most needed in this crisis. They build so few that they can even send a politician to deliver the keys to each successful bidder.

This situation also extends to the rental market. Having allowed the touristic use of dwellings they have removed these properties from the market for residents. 

They are also treating homeowners as an enemy under suspicion. Those who want to rent know that neither justice nor power will protect them. The absolute failure in the housing market is a result of the lack of realism by our politicians. You cannot manage a market where home ownership is considered shameful. This is a business where without supply, prices will skyrocket and the victim will be the citizens.    The island must be protected, but not by preventing housing on rural land and prohibiting ownership for the working and middle classes. Open spaces need to be “enabled” for living. The alternative is to go for a model contrary to Europe and the market economy, based on public intervention, which has only failed in countries that have tried this model. The ignorant people who govern us have already mooted this idea of limiting prices, which will make the situation more chronic.  It is like blaming the firefighter for the fire. They must learn to be pragmatic. If not, their only option will be to flee after the failure.

The Balearic Government wants to limit foreign property purchases

The Balearic Government creates a committee made up of members from the government, the university and lawyers will look into ways of limiting the number of foreigners buying properties in the Balearic Islands after a MES motion was approved.

The objective will be analyzed in the context of European Law, which specifically allows for the free movement of its people and capital. 

The idea is to reduce demand, thus leading to a fall in house price values, making them more accessible to locals, who are struggling to buy property at present on comparably low wages. 

The idea is to convince the EU that the Balearic archipelago is unique and therefore limitations are necessary for sustainability.  

Spain to offer visas to foreign digital nomads.

The Spanish Parliament has approved a new law that will allow digital nomads a visa to stay, with an anticipated corporation tax of 15%.    

The law was introduced as Spain needed to be more attractive to businessmen and other entrepreneurs, as the country in 2015 was ranked among the worst countries in the OECD to start a business in. 

There are some limitations though, including a minimum salary of 2,000€ per month, a company active less than 5 years, revenues up to 5m€ pa etc. 

Other benefits include a 50,000€ employee exemption on stock option.  It also claims third-country nationals will be able to register a limited company in 6 hours. 

Military Permit Mallorca

Since 1st January 2021, when the UK left the European Union, it is now necessary to have a permit from the Ministry of Defence when buying property on rustic land. It should be clear that this rule does not affect properties in Urban areas.

At the same time, they will check for a criminal record and require a plan of the property and land.

This is, in fact, an old law drafted in the last year of the Franco regime (Royal decree 689 published in 1978) in order to protect national security. It has been used for non-EU purchasers for over four decades.    

At the moment, this affects all non-EU purchasers, except the Swiss and Norwegians, who already have an exemption agreement in place. 

The Balearic Property Registrars College recognizes this is not going to help investment in the islands as the process at present takes about  6 months. 

It should be noted that the permit is property and person-specific so you cannot get the permit in advance when for example, you start searching for a rural property.

At Property Works, sadly, we are seeing vendors turn down good offers from Brits as they do not wish to wait for the purchaser to obtain this permission, much preferring an EU citizen who can complete with less fuss or delay.   

We have also heard that in some property registers (Ibiza), they are allowing properties to be registered with the clause “pending military certificate”. This appears to be an exception and potentially risky for the registrar and notary if the permit is denied.

Hopefully, this rule will be changed soon. There is significant pressure from all sides, especially agents and lawyers to remove this unnecessary layer of bureaucracy. 

 

 

Price variations in the Balearics

Article by the Secret Surveyor.

Knowing whether the price of the average property is going to increase or decrease is key for investors looking at the property market. We are going to lay out some predictions and show a general overview of the trend of property market prices in the Balearics.

GENERAL STATS ABOUT THE PRICE OF THE AVERAGE PROPERTY IN THE BALEARICS:

  • 3rd most expensive region in Spain with an average price of m2 of 2272 only behind Madrid and Basque Country.
  • 3rd region which has grown the most since 2015
  • At one of the highest points it has ever been

Only real case of growth since 2004

When analysing the price of property in the Balearics it is interesting to note that official valuations are much higher than they were at the pre-recession phase. As opposed to the rest of Spain, the Balearics average price of $/m2 is 23% higher than what it was in 2004. This is the only real case of significant price growth in a large region in Spain. The only other regions which shows a similar trend are Galicia, Extremadura and Cataluña all with growth under 10%.    

It is in fact in one of the highest points it has ever been. Current price of property is only behind years 2007 and 2008.

There is growth but it is slowing down.

The Balearics show strong growth in the last 3 years. Price’s have gone up significantly: since 2015 they have risen by 13% making it the 3rd region with biggest growth in that space of time.

However, in 2018 there is a significant change: in comparison to 2017 there is only a 3% increase. Opposite to the 2015-2018 period, during this year growth is below the average in Spain. In the last quarter of 2018 change was of only 0,4%, significantly below the average in Spain and one of the lowest quarterly growths in recent years.


Why Balearics has been so strong

Inland Spain was significantly more affected by the property crash than the Balearics:

  • Foreign Investment. Balearics wasn’t as dependent on local market and hence demand for property didn’t fall as much as in other regions.
  • Luxury market: known to be much more stable in recessions, the Balearics has one of the biggest luxury markets in Spain.

Will prices keep going up?

Balearics have historically been a very strong growing market yet growth seems to be slowing down. In fact, what makes the Balearics a strong market is islowing down the growth.
The Balearics are a strong stable market as mentioned due to the size of the luxury market and due to foreign investment.
Two key exogenous factors have caused these pillars to cause stagnation:

a) Macroeconomic tensions: Brexit, yellow vests, Trump, Putin… 2018 has been a year full of uncertainty and political tension. 2019’s prediction is uncertain for everyone. Brexit exemplifies how this affects the property market. British citizens (historically one of the strongest buyers in the market) do not know whether there will be any changes in tax payments, regulation or even their rights as EU citizens if they buy a property in Spain. This undoubtedly has caused, and will cause, property markets to stagnate.

b) Local legislation uncertainty. The Balearic government, and especially the Palma Town hall, has created and changed laws regarding property during their whole legislation. The mayor of Palma is in fact being taken to court regarding a controversial law regarding property rentals. As with foreign buyers, uncertainty is causing many buyers to not buy in Palma and the Balearics.

Will prices keep going up? The market is stagnated. There are however positive signs: Brexit deal looms and there are going to be regional elections at the beginning of 2019 in the Balearics. It would be impossible to give a realistic prediction yet the mere fact that part of the uncertainty will be taken out of the equation will most definitely help the property market.

All data is taken from the official Ministerio de Fomento 2019 document. Find the methodology in: https://apps.fomento.gob.es/BoletinOnline2/?nivel=2&orden=35000000