Rental licenses in Mallorca: Current situation and existing types ETV Mallorca

Rental licenses in Mallorca: Current situation and existing types

In the first quarter of 2022, the Balearic government passed an urgent decree to modify the law regarding tourism, with an eye to sustainability. At the same time, the Balearic government placed a freeze on new vacation rental licenses for four years, until the councils could reconvene and decide whether to continue the moratorium or suspend it. The freeze means that currently, those properties which were already in possession of such a license can keep it and continue to be rented through platforms such as Airbnb, but no new licenses are being granted.

However, with the elections and recent changes in governance came new campaign promises and declarations of intentions to unfreeze rental licenses on Mallorca. It is still unknown when and how this will come to pass, whether the previous decree will be completely annulled or whether the ban will be lifted only in certain areas. It should be noted that Menorca and Ibiza have already lifted their ban on new rental licenses.

We have been diligently examining the implications of this type of regulation for property owners, potential buyers, and individuals interested in property investment on the island, especially since 2018, when the local government of Mallorca introduced a fresh set of regulations concerning rental properties. If you’re serious about obtaining a license once the freeze is over, or purchasing a property that already has a touristic license, we recommend seeking advice from property lawyers such as Mercadal Abogados (www.mercadalabogados.com) with experience specifically in Mallorca, and we would be happy to put you in touch with them, should you wish.

The Different Types of Holiday Rental Licenses - ETV, ETVPL, and ETV60

There are now three distinct types of rental licenses existing in Mallorca. These allow property owners to legitimately rent their homes to tourists. Each type of license has its own cost and pertains to different types of homes.

ETV

The ETV license is the most comprehensive and expensive of the three rental license types. It is also known as the “ETH365_uni.” This license permits year-round rental activity (“365”) and, notably, does not require renewal. It allows indefinite tourism rentals, making it particularly suited for long-term investments, with a price set at €3500 per guest space (as per 2022, before the freeze). This price is determined based on the number of bedrooms in the property, so a 1-bedroom cottage would cost €7,000 (as it has a guest space for 2), while a 6-bedroom mountain-top mansion would cost €77,000 (as it accommodates up to 12 people).

Furthermore, the ETV license is only applicable to standalone homes, making it unavailable to apartment owners.

If you’re considering a substantial real estate investment for rentals, note that there is a limit of three ETV licenses per homeowner.

ETVPL

Like the ETV license, the ETVPL, also referred to as “ETH365_pluri,” allows year-round rentals but must be renewed every five years. Though there is a moratorium on new licenses, ETVPL licenses can be renewed as of February, 2023. Importantly, the renewal application must be submitted before the end of the 5-year period, or the ETVPL will automatically expire.

The major difference, apart from the renewal requirement, is the cost. Before the freeze on new rental licenses, the ETVPL cost approximately €875 per guest space.

The “PL” in ETVPL stands for “plurifamiliar,” indicating that this license is designed for homes in buildings with multiple units. Therefore, detached/standalone homes can’t apply for an ETVPL license.

Determining whether your property falls into this category might be complex, so it’s advisable to seek legal guidance, especially if you own an apartment or a condominium with shared features.

Another vital detail about the ETVPL license is that you require the consent of other homeowners in your building or vicinity, who must agree to your intention to commercialize your property as a holiday rental. The precise form of consent needed, whether from every homeowner, the closest neighbors, or a board of owners, remains to be determined and may necessitate legal advice.

ETV60

The ETV60 license encompasses two categories: one for standalone homes and one for plurifamiliar homes (“ETV60_uni” and “ETV60_pluri”), which are treated similarly.

ETV60 licenses permit a maximum of 60 days of rental activity per year, with these days required to be spread over two non-consecutive months, one of which can’t be July or August.

The ETV60 license cost about €290 per guest space before the freeze in 2022.

Similar to the ETVPL, ETV60 licenses must be renewed every five years, and if your property is not standalone, you will need the consent of other homeowners.

General Rules and Reminders about Rental Licenses in Mallorca

If and when new rental licenses may be granted, if you’re looking to obtain one for your property, it will be vital to be prepared. Have all documentation at the ready, including a cédula, energy certificate, and proof of payment of property taxes and the waste removal tax.  Additionally, there seems to be a general requirement that the property must have been used for residential living for at least five years prior to applying for a license. This doesn’t necessarily mean the current homeowner must have lived there for five years, but newly constructed homes might face challenges in obtaining a license. Seek legal advice if you’re constructing a new home with intentions of obtaining a holiday rental license.

It’s worth noting that the information provided in this blog post pertains to short-term holiday rentals, which typically involve tourists staying for brief periods. If you intend to rent your property to tenants for longer than one month, a different set of regulations, known as the Law of Urban Rental, may apply.

We strongly recommend seeking legal advice from a team of experts who are familiar with the process of obtaining a license in the area where your property is located. Additionally, keep in mind that tourism and rental licenses have been subjects of political debate in Mallorca, and regulations may change over time.

Likewise, when purchasing a property that already has a touristic license, all the information and documents that were required to obtain the license should be in place and double-checked by your lawyer, as it is not only important to have a license, but also how the license was obtained.

For the most current guidance, we suggest consulting with specialists who are well-versed in the field. We at Private Property Mallorca have several contacts with expertise in this area, and we would be happy to put you in touch with them.

Multilingual real estate lawyers helping you to make safe, secure and strategic property investments in Spain.