Few weeks to the beginning of the tourist season and continuing with the follow-up we made to the situation of the Balearics Law of Tourism, has just confirmed that most of the homes for vacation rentals in Palma don’t meet the requirements set in that law.

This statement is based on data as evident as the fact that while the Ministry of Tourism registers 302 homes of this type, in the capital of Mallorca more than 6,000 tourist homes are rented through the internet.

Recall that the Tourism Law prohibits tourist rental in multi-family buildings.

This circumstance that is not fulfilled in the majority of dwellings, according to the abysmal difference in these registry data. The Balearic Government is studying the implementation of a new standard, which allows rental activity in multi-family housing, with the approval of the neighbors. A decision that has many detractors. From the association of tourist apartments Aptur they argue that this measure is not viable and that the houses in these circumstances are in a lawless situation, since the Law of Urban Leases contemplates to offer tourist services «in any type of house» by a «short period of time».


Another novelty that has recently been known is that the towns of Mallorca’s interior will not limit tourist rental and therefore are exempt from distinction between tourist and residential areas, a requirement included in the draft of the Holiday Rental Law.

With this measure, the Government of the Balearic Islands aims to benefit small towns that have empty houses and where the problem of access to a home is non-existent. Thus, the economic activity of these nuclei won’t be restricted. This measure will not give freedom to the tourist rent, since the law sets some requirements when renting, such as accessibility, energy consumption and not having previous penalties in urban planning.


From Ripoll Mateu Solicitors Mallorca we recommend hiring your holiday home in Mallorca through companies in the sector that are solvent and offer guarantees. Balearic Villas  in Pollença, with over 15 years of experience in the Mallorca holiday villas industry,  have the experts & the know-how to create the perfect, independent-living holiday for you.



Recent data from the Balearic Government confirm that the economy of the islands grew by 4.1% in 2016, the highest growth in the last 16 years. There were increases in all quarters, highlighting the good behavior in tourism in seasons in which traditionally presents less activity.

In the same report, the Government believes that the ‘Brexit’ will have little impact on the Balearic Islands during this year, following the same line of what happened in 2016 since the process is still in a negotiating moment.

It’s expected that the Mallorcan economy will not be unduly prejudiced in the short term by the UK decision to leave the European Union, despite receiving more than three million British tourists a year and has a population of almost 20 000 residents.

The Balearic economy is in a bullish process

Balearics is experiencing exceptional tourist seasons thanks to the quality of its services and the collateral consequences of the difficult situation being experienced by other countries that in the past were direct competitors in this sector.

Following in the line of these data, it’s to emphasize that in January Balearics received a total of 107,087 foreign tourists. A figure that translates to the arrival of almost 5% more tourists than in January 2016. According to INE data, Germany remains the main emitting country of the Islands, with 46.4% of tourists; Followed by the United Kingdom, which sent to the Balearic Islands 10.4% of visitors.

floor clause-mallorca

The Balearic Islands will continue to grow in 2017, with a forecast of 3.6% after two years of growth. The Government expects that 2017 will also be one of the highest values recorded in the last 16 years, close to the results of 2016, and will represent an accumulation of growth of 11% in the last three years.

The forecast for 2017 places the Balearic Islands in a process of «normalization» of the growth cycle.

Growth is expected between 3.2% and 3.7% in all Islands. By sectors, the gross value added shows positive increases in all activities: the service sector is the one that grows the most, 3.8%.

Another significant finding is that the number of home mortgages increased by 14% in 2016 over the previous year, to 281,328, thus earning its third consecutive annual increase after seven years of declines.

With these very positive conditions, we can consider that it is a good time to invest in the Balearics, especially in Mallorca.


The Spanish Constitutional Court has recently annulled the municipal tax on capital gains. This tax levies the revaluation of real estate when they are sold but is always paid, although the properties have lost value.

That is why it has resolved that in no case can the legislator establish a tax taking into account acts or facts that are not exponents of a real or potential wealth. In this way, it will force to reform this local tax, technically called Tax on the Increase of the Value of the Land of Urban Nature, and that is considered an important source of income for the municipalities.

The Court considers that it is not legal to impose a tax when there hasn’t been economic gain

The rule that questions the Court imposes a tax on the added value of urban land. This tax is due at the time of sale of the property and is calculated objectively from its cadastral value and from the years (between a minimum of one and a maximum of twenty) during which the owner has been the holder thereof.

The appraiser Tinsa calculates that the number of houses in Spain on which it could be claimed the return of the payment of the surplus value, having been transmitted a value inferior to the one of acquisition would be around 550,000. This figure includes not only sales operations, but also donations, exchanges and inheritances, since these are also taxed with the capital gains tax.


The problem is that many homes were bought at high prices during the years of the ‘real estate bubble’, but their owners sold them during subsequent years of crisis with lower amounts because of the devaluation that occurred in this market. However, at that time many municipalities reviewed their cadastral values upwards and with very large increases taking into account the land values that were applied during the previous boom period. This situation has caused that in the Balearics they have been paying of more in many taxes during the last years.

In this situation, these local taxes should be designed so that new situations in which has not produced an economic gain are not graven or prevent the  taxpayers whose are not actually prove that there was an increase of value.

Hacienda and municipalities are committed to find a solution that satisfies both parties, owners and municipalities.

If you need more information or advice on the return of capital gains, please do not hesitate to contact us. At Ripoll & Mateu Solicitors Mallorca we advise, defend and represent our clients at all levels. Our greatest asset is an infrastructure of professional leaders in each field of action, especially Real Estate and Tax, as well as our international vocation and multilingual capacity.