Buying property in Mallorca. Your 2024 guide

With its beaches, charming villages, and bustling city life, Mallorca provides an ideal setting for owning a property that can serve as your getaway or a new home for a fresh start.

Wondering what you need to know before diving in? Look no further. 

This guide will walk you through the most important tips and steps for buying property in Mallorca as a foreigner.

Living in Mallorca: what you need to know

To begin, let's delve into some fundamental information you should be aware of in Mallorca if you are contemplating buying a property here:

• Location: Mallorca is one of the Balearic Islands, located in the Mediterranean Sea off the coast of Spain
• Climate: Mediterranean climate with hot summers and mild winters
• Currency: Euro
• Main languages: Spanish and Catalan; English, German, and French widely spoken
• Population: 1.22 million
• Number of British expats in the Balearic Islands: approx 18.000

Cost of living in Mallorca compared to the UK

The cost of living in Mallorca is generally lower compared to the UK across various spending categories. 

To give you an idea of the price differences, here are a few examples:

• a three-course meal for two people costs around 42£, compared to 80£ in the UK
• a domestic beer cost around 3£, compared to 6£ in the UK
• the price per square meter for an apartment in Mallorca can be up to 70% cheaper than in the UK, depending on whether it's located inside or outside a city center

What’s the property market like in Mallorca?

Mallorca's popularity as a holiday destination and appealing lifestyle contribute to a thriving real estate market. 

In January 2024, the average property price per square meter in Mallorca was 4,083 EUR. This represents an average increase of 10.17% compared to January 2023, when it was 3,706 EUR/m2. 

Despite increased inflation and the ongoing European energy crisis, Mallorca's property prices continue to rise steadily, outperforming other European real estate markets.

Carlos Vazquez, lawyer at Hoteland, a law firm that specializes in international property law, explains the appeal, “Foreign buyers are attracted to Spain, especially Mallorca, for real estate investments due to its strong market and rising property values. As the ECB says, Spain's stable money situation also helps protect investors from risks, making Mallorca a great place to invest.”

Can foreigners buy property in Mallorca?

Yes, foreigners can buy property in Mallorca. Spain's real estate market is open to international buyers, including both EU and non-EU citizens.

A mortgage can significantly enhance your budget for buying a property in Mallorca. Make sure to analyze Homevest to compare the mortgage offers from Spain’s leading bank for non-residents. 

How easy is it to get a mortgage in Mallorca as a foreigner?

As a foreigner, obtaining a mortgage in Mallorca is relatively straightforward, similar to the rest of Spain.

Eligibility criteria

The mortgage conditions can vary depending on the bank and the individual's circumstances. Below are some common factors to consider:

• Permanent employment or solid self-employed background with 2-3 years of experience
• Minimum 6 months of employment
• Monthly net income of 2000-2500 EUR
• Indebtedness ratio not exceeding 40% of monthly net income
• Minimum 30% deposit
• Clean credit history

Applying with someone else might help you borrow more and increase your chances of getting approved. So, applying for a mortgage with a co-applicant could be a good idea.

What are the best Spanish mortgages for buying a property in Mallorca?

Sabadell, Cajasur, Unicaja, Bankinter, BBVA, Santander, Caixa, and UCI are among the Spanish banks that provide mortgage options for foreigners interested in buying a property in Mallorca.

Selecting the best mortgage for non-residents in Spain involves more than just comparing interest rates. Finding a mortgage that fits your personal and financial circumstances is essential.

Homevest helps you secure the best deal for your property in Mallorca

Dealing with the mortgage process abroad can be challenging, especially with the extensive paperwork required for each bank application. Homevest, as a digital service, streamlines this process, ensuring your mortgage is ready for your signing appointment.

You'll have access to a dedicated mortgage broker, available to assist you from start to finish, and you'll benefit from priority banking service.

What is the cost of buying a property in Mallorca?

Factors like location and property type influence the expenses associated with buying a property in Mallorca. Whether you're acquiring a new property from a developer or a resale property from an individual, it's essential to account for taxes such as Value Added Tax (VAT), Transfer Tax, and additional fees for notary and registry services.

Suppose you buy a second-hand property worth 350,000 EUR in Palma de Mallorca. In addition to the sale price, you will have to pay another 34,450 EUR for the following taxes: 

Simulation rates on December 5, 2023. Prices may vary depending on the value of the property

You may also incur mortgage, gestoría, bank, land registry, and real estate agent fees. Discover everything you need about the taxes you pay when buying a property in Spain as a non-resident. 

Frequently asked questions

1/ Can you buy property in Mallorca after Brexit?

Yes, UK citizens can still buy property and access mortgages in Spain post-Brexit, much like before. It’s worth mentioning that the Spanish government is advocating to extend the post-Brexit 90-day stay limit for British citizens in EU countries.

Read on to learn everything you need about securing a mortgage in Spain as a UK citizen.

2/ Is it expensive to retire in Mallorca?

Spain is a top destination for retirees thanks to its lower living costs. For instance, consumer prices in Spain are 21.1% lower than in the UK, excluding rent, and property is often more affordable - apartments outside city centers in Spain are 49.4% cheaper than in many UK cities. 

To retire comfortably, you would need about £1,500 to £1,650 monthly, or £18,000 to £19,800 annually. Read on for more about retiring in Spain from the UK.

3/ Is buying a property in Mallorca a good investment?

Buying property in Mallorca is a good investment, as it is less affected by economic cycles.

“Unlike other areas where property prices may fluctuate, in Mallorca, they consistently rise. This trend, evident for over 20 years, indicates that prices will continue increasing. Therefore, real estate in Mallorca is seen as a safe-haven asset, offering effective portfolio diversification”, says Diana Diaz, lawyer at Hoteland, a law firm that specializes in international property law.

Buying a property abroad is a significant change, and navigating the system in a new country can be challenging. Luckily, Homevest makes purchasing your dream house in Mallorca much more manageable. 

Sources used and checked in March 2024:

1. Population of the Balearic Islands in 2023
2. Balearics has the largest foreign population in Spain
3. Cost of living comparison between London and Palma de Mallorca
4. Mallorca Property Prices & Market Report 2023-2024
5. Sales cost calculator

We recommend obtaining professional or specialist advice before taking or refraining from any action based on the content in this article. The information in this article does not constitute legal, tax, or other professional advice from Homevest Limited. Prior results do not guarantee a similar outcome. We make no representations, warranties, or guarantees, whether express or implied, that the content in this article is accurate, complete, or up to date.