Rental laws and legislation can and has changed with every new government here in Mallorca. This information is up to date as of 2020, and may be subject to change.
Unlike short term rentals, landlords do not require any special license for long term rentals.
First and foremost you will need an Energy Certificate by law. This is relatively cheap and easy to obtain (contact us for information). It is advisable to have an official contract drawn up, agreed upon by both tenant and landlord, which is beneficial to both parties.
Take into account all aspects of your property and make it clear with the tenant-to-be what you expect. For example if you have a pool or garden it is best to stipulate who is responsible for the care and maintenance whether it is included in the rent. Are pets are allowed, if the home is furnished you may wish to increase the deposit to include damage, who will pay for utilities, annual rubbish and community fees, phone and internet, and Spanish property tax are amongst other things to consider.
Under Spanish law owners are entitled to a one month’s deposit on unfurnished rentals and two for furnished ones. These are the minimums and sometimes more can be asked, dependent upon the standard of property. If there is a failure to pay the rent, the landlord must notify the tenant and if there is no response, they may file a petition for an eviction order through the courts. The tenant has a 10-day grace period to pay, but if no payment is made an eviction order is carried out. There are thankfully new laws to protect owners from flagrant non-payment, but the average time it can take to get rid of a tenant is 1 year.
If an agent is involved in the rental they can charge between 1 and 2 months fees for their agency finder’s fee, normally paid by the tenant. It is their responsibility to handle the collection of deposits and who mediate or assist with the contracts.
It is the landlord’s responsibility provide a structurally sound and habitable living space. Major or necessary plumbing, electrical or other structural works are the responsibility of the owner. Tenants however are required to return the property in same condition as when they moved in, minus basic wear and tear. It must be clean upon departure and without serious damage. Repainting walls or renovations are not usually required to be carried out by the tenant unless there is damage, such as holes in walls that need repair.
The minimum rental period is 12 months but the most recent legislation gives tenants the right to ask for a five year minimum lease, and seven if the landlord is a company. This means owners cannot evict before that period is up, unless extenuating circumstances exist. Divorce or homelessness on the part of the owner can result in a breaking of the contract legally but are not common. On the other side if a minor is amongst the tenants this can also extend their term of contract if potentially at risk of being made homeless. Flexible rental periods are applicable during the first year of renting, allowing tenants to terminate the lease after 6 months with one month’s notice. Landlords can demand additional compensation if this occurs, though. After the rental period is up, owners can ask to raise the rent based on the current rates of inflation, but not above that unless they have performed some major renovation work with your consent.
Non-residents currently pay 24% and are not allowed deductions. EU residents can ask if they qualify for a reduced income tax rate of 19%. They can also deduct certain expenses against the rental property so long as they are directly related to the income generated by the property.
Short Term Holiday rentals for short periods of no more than a month are much more complex and you need to apply for a touristic license called an estancias turísticas en viviendas (ETV). But due to recent legislation, whilst any and all properties potentially can be licensed as touristic rentals, not all areas of the island permit them. You need to check with your local Town Hall whether you Zone is permissible.
Beware there is an official App (Verificador Alquiler Turístico on the App Store) which your neighbour or guest can check to see if you are listed. If you are not listed they can denounce you and substantial fines required to be paid -
If the property is part of a Committee of Property Owners (Communidad de Propietarios) where annual fees are paid for communal space, property owners should check with the bylaws associated to make sure renting is allowed.
ETV licenses can be arranged through a lawyer through the Holiday Rental License Stock Exchange Consortium (CBAT) in Palma. These are sold based on the capacity of the property as determined by the occupancy certificate. The capacity determines the number of places each property is entitled to. Laws are strict and there is a regional and island-wide maximum.
Individual rooms cannot be rented, it must be the whole property with 1 bathroom for every 4 guests. Owners must supply a minimum of guest amenities such as sheets, towels and cleaning services. If the home is part of a community, the other owners must be in agreement to allow the rental. The plaque showing your ETV license number must be visible from the exterior of the property, and the ETV number must be included in all advertising materials. Additionally, the home must have an energy rating of D or above if built after 2008, or F or above if built before that.
Another short-term rental option open to property owners is the “per season” rental. This requires guests have a minimum stay of one month with no requirement for an ETV license. The property cannot be marketed on the open market or via any website for this to be in compliance. House exchange plans and “free of charge” family and friends stays also fall under this option.
Palma is a notable exception to the rule. It has a rather well-publicised and unique set of rules, whereby flats and apartments are excluded from obtaining rental licenses. Detached houses may be eligible, but only if they pass the criteria set out above.