Authored by the expert who managed and guided the team behind the Spain Property Pack
Yes, the analysis of Palma de Mallorca's property market is included in our pack
Buying property in Palma de Mallorca as a foreigner is absolutely possible, but the rules around visas, taxes, and rental restrictions can trip you up if you're not prepared.
This guide walks you through what you can legally own, what paperwork you'll need, and the costs you should expect in January 2026.
We update this article regularly to reflect the latest regulatory changes and market conditions in Palma de Mallorca.
And if you're planning to buy a property in this place, you may want to download our pack covering the real estate market in Palma de Mallorca.
Insights
- Nearly 30% of all property purchases in the Balearic Islands in 2025 were made by foreigners, making Palma de Mallorca one of Spain's most internationally active real estate markets.
- Spain's Golden Visa program ended on April 3, 2025, so buying property in Palma de Mallorca no longer provides a pathway to residency for non-EU buyers.
- Non-resident buyers in Palma de Mallorca typically receive mortgage loan-to-value ratios of 60% to 70%, compared to up to 80% for Spanish residents.
- The Balearic government actively enforces illegal tourist rental rules, and owning a flat in Palma de Mallorca does not automatically give you the right to list it on Airbnb.
- Closing costs for resale properties in Palma de Mallorca typically run around 11.5% of the purchase price, with transfer tax (ITP) being the largest component.
- Palma's annual property tax (IBI) is calculated at 0.445% of the cadastral value, which is usually much lower than the market price you actually pay.
- Foreigners earning rental income in Palma de Mallorca must file Spanish tax returns using Modelo 210, even if they live abroad full-time.
- Mortgage interest rates for foreigners in Palma de Mallorca in January 2026 typically range from 3.2% to 4.0% for fixed-rate loans.
- Properties near Palma de Mallorca's coastline may be subject to restrictions under Spain's Coastal Law, limiting what you can build or modify.
What can I legally buy and truly own as a foreigner in Palma de Mallorca?
What property types can foreigners legally buy in Palma de Mallorca right now?
In January 2026, foreigners from both EU and non-EU countries can legally buy apartments, townhouses, villas, and traditional stone homes (fincas) in Palma de Mallorca with the same core ownership rights as Spanish citizens.
The main legal conditions that affect foreign buyers in Palma de Mallorca are not about the right to purchase itself, but about paperwork requirements like obtaining a NIE (foreigner identification number) and understanding your tax obligations as a non-resident.
One important limitation to keep in mind is that owning property in Palma de Mallorca does not automatically allow you to do short-term tourist rentals, which are heavily regulated and require specific licenses that are increasingly difficult to obtain.
Additionally, if you're buying near the coastline in Palma de Mallorca, Spain's Coastal Law may impose restrictions on what you can build, expand, or modify on the property.
Finally, please note that our pack about the property market in Palma de Mallorca is specifically tailored to foreigners.
Can I own land in my own name in Palma de Mallorca right now?
Yes, foreigners can own land directly in their own name in Palma de Mallorca, including the land underneath a house or villa, without needing any special corporate structure or local partner.
This applies to most types of land, but if you're purchasing rural or rustic land outside the city center, you need to be extra careful about verifying what is actually registered, what is legally built, and what zoning rules apply.
For properties near the sea, even if you legally own the plot, Spain's Coastal Law creates public domain zones and easements that can restrict your ability to expand, rebuild, or add terraces.
As of 2026, what other key foreign-ownership rules or limits should I know in Palma de Mallorca?
As of early 2026, the most important rule affecting foreign buyers in Palma de Mallorca is that short-term tourist rentals require a specific license, and the Balearic government has made enforcement against illegal rentals a formal policy priority.
There is no foreign-ownership quota for apartments or condos in Palma de Mallorca, so you can buy in any building regardless of how many other units are owned by foreigners.
One key registration requirement is that you must obtain a NIE (foreigner identification number) before you can complete the purchase, which you can apply for either in Spain or through a Spanish consulate abroad.
The most notable recent regulatory change is that Spain ended its investor visa (Golden Visa) program on April 3, 2025, so buying property in Palma de Mallorca no longer provides any pathway to residency.
What's the biggest ownership mistake foreigners make in Palma de Mallorca right now?
The single biggest ownership mistake foreigners make in Palma de Mallorca is buying a property assuming they can earn income from short-term tourist rentals and pricing the deal as if that rental income is guaranteed.
If you make this mistake, you could face substantial fines from the Balearic government, be forced to stop renting immediately, and end up with a property that cannot generate the income you expected to cover your mortgage or costs.
Other classic pitfalls in Palma de Mallorca include not checking what is actually registered at the Land Registry versus what is physically built, overlooking unpaid community fees or local taxes attached to the property, and failing to verify coastal restrictions before buying near the sea.
We have made this infographic to give you a quick and clear snapshot of the property market in Spain. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
Which visa or residency status changes what I can do in Palma de Mallorca?
Do I need a specific visa to buy property in Palma de Mallorca right now?
No, you do not need a special visa to buy property in Palma de Mallorca in January 2026, and many foreigners complete their purchase while visiting on a standard tourist visa.
The main administrative requirement that can block foreign buyers without local residency is not having a NIE (foreigner identification number), which is mandatory for the transaction and all related tax filings.
Yes, you effectively need a local tax ID before buying in Palma de Mallorca, and the NIE serves this purpose for foreigners, which you can apply for either inside Spain at a police office or from abroad through a Spanish consulate.
The typical documents a foreign buyer must present in Palma de Mallorca include a valid passport, the NIE, proof of funds or mortgage pre-approval, and if you cannot attend in person, a notarized power of attorney allowing your lawyer to sign on your behalf.
Does buying property help me get residency and citizenship in Palma de Mallorca in 2026?
As of early 2026, buying property in Palma de Mallorca does not by itself give you residency or citizenship in Spain, and the investment pathway that previously existed has been closed.
Spain's investor visa program (often called the Golden Visa) officially ended on April 3, 2025, so purchasing real estate no longer qualifies you for any form of residency permit.
If you want to live in Palma de Mallorca, you will need to pursue standard residency pathways such as non-lucrative residence (requiring proof of income and health insurance), work-based permits, digital nomad visas (if eligible), or family reunification routes depending on your personal circumstances.
Can I legally rent out property on my visa in Palma de Mallorca right now?
Your visa status generally does not prevent you from renting out property you own in Palma de Mallorca, but what matters is whether you have the proper licenses and whether you meet your tax obligations as a non-resident owner.
You do not need to live in Spain to rent out your property, and many foreign owners manage their Palma de Mallorca rentals from abroad, though most appoint a local agent or representative for practical tasks like key handovers and maintenance.
The most important detail for foreigners renting out property in Palma de Mallorca is that long-term rentals are generally straightforward, but short-term tourist rentals require a specific license that is very difficult to obtain, and the tax authorities expect you to file Spanish returns (Modelo 210) on your rental income even if you live outside Spain.
We cover everything there is to know about buying and renting out in Palma de Mallorca here.
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How does the buying process actually work step-by-step in Palma de Mallorca?
What are the exact steps to buy property in Palma de Mallorca right now?
The standard sequence to buy property in Palma de Mallorca goes like this: choose a property and make an offer, pay a reservation deposit, conduct due diligence, sign a private contract (usually called "arras") with a larger deposit, obtain your NIE and open a Spanish bank account, sign the public deed at the notary, pay the applicable taxes, and finally register the deed at the Land Registry.
You do not have to be physically present for any step of the purchase in Palma de Mallorca, because you can grant a power of attorney to a lawyer or representative who can sign all documents on your behalf.
The step that typically makes the deal legally binding for both parties in Palma de Mallorca is signing the private contract (contrato de arras), which usually involves paying a deposit of around 10% that you forfeit if you back out, or receive double if the seller backs out.
The typical timeline from accepted offer to final registration in Palma de Mallorca ranges from 6 to 12 weeks, though it can be faster if no mortgage is involved and all documents are ready, or slower if there are complications with permits or financing.
We have a document entirely dedicated to the whole buying process our pack about properties in Palma de Mallorca.
Is it mandatory to get a lawyer or a notary to buy a property in Palma de Mallorca right now?
Using a notary is effectively mandatory in Palma de Mallorca because the notarized public deed (escritura) is required to register your ownership at the Land Registry, but hiring a lawyer is not legally required even though it is strongly recommended for foreign buyers.
The key difference is that the notary in Palma de Mallorca verifies identities, ensures the deed is properly executed, and confirms basic registry checks, but does not actively protect your interests or investigate problems, while a lawyer works exclusively for you and digs into issues like zoning legality, hidden debts, and rental restrictions before you sign anything.
One essential item that should be explicitly included in your lawyer's scope in Palma de Mallorca is a full verification that the property's physical state matches what is officially registered, because mismatches between what is built and what is on paper are a common source of expensive problems.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Spain versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
What checks should I run so I don't buy a problem property in Palma de Mallorca?
How do I verify title and ownership history in Palma de Mallorca right now?
The official registry you should use to verify title and ownership history in Palma de Mallorca is the Registro de la Propiedad (Land Registry), which holds the definitive legal record of who owns what and what charges exist against the property.
The key document you should request is a nota simple, which is an extract from the Land Registry showing the current registered owner, the property description, boundaries, and any mortgages or encumbrances.
A realistic look-back period for ownership history checks in Palma de Mallorca is typically 10 to 15 years, which helps you identify any unusual transfers, disputes, or patterns that might signal problems.
One clear red flag that should stop or pause your purchase is finding an annotation of litigation, an embargo, or an unresolved inheritance claim on the property, because these can mean the seller may not have clear authority to sell.
You will find here the list of classic mistakes people make when buying a property in Palma de Mallorca.
How do I confirm there are no liens in Palma de Mallorca right now?
The standard way to confirm there are no liens or encumbrances on a property in Palma de Mallorca is to request an up-to-date nota simple from the Land Registry, which lists any registered mortgages, embargoes, easements, or other charges.
One common type of lien you should specifically ask about in Palma de Mallorca is unpaid community fees, because in Spain the property itself can be liable for debts to the homeowners' association, not just the previous owner.
The best written proof of lien status is a combination of the nota simple from the Land Registry plus a certificate from the community of owners confirming no outstanding fees, and you should also check that the IBI property tax is paid up to date.
How do I check zoning and permitted use in Palma de Mallorca right now?
The authority you should use to check zoning and permitted use in Palma de Mallorca is the Ajuntament de Palma (Palma City Council), specifically the urban planning department, which holds records on what is allowed to be built and how each plot is classified.
The key document that confirms the zoning classification is the certificado urbanístico or the ficha urbanística, which your lawyer or an architect can request to see exactly what uses are permitted and whether the current structures comply.
One common zoning pitfall that foreign buyers frequently miss in Palma de Mallorca is purchasing a property with additions or extensions that were never properly permitted, which can result in demolition orders, fines, or difficulties when you try to sell later.
Buying real estate in Palma de Mallorca can be risky
An increasing number of foreign investors are showing interest. However, 90% of them will make mistakes. Avoid the pitfalls with our comprehensive guide.
Can I get a mortgage as a foreigner in Palma de Mallorca, and on what terms?
Do banks lend to foreigners for homes in Palma de Mallorca in 2026?
As of early 2026, yes, Spanish banks commonly lend to foreigners buying property in Palma de Mallorca, especially since the Balearic Islands have a high volume of international buyers and banks have established processes for non-resident applications.
The realistic loan-to-value (LTV) range that foreign non-resident borrowers typically see in Palma de Mallorca is 60% to 70%, meaning you should expect to bring at least 30% to 40% of the purchase price as a down payment.
The most common eligibility requirement that determines whether a foreigner qualifies for a mortgage in Palma de Mallorca is proof of stable income, which banks verify through tax returns, payslips, or bank statements from your home country, often requiring documents to be translated and apostilled.
You can also read our latest update about mortgage and interest rates in Spain.
Which banks are most foreigner-friendly in Palma de Mallorca in 2026?
As of early 2026, the banks most commonly used by foreign buyers in Palma de Mallorca are Santander, BBVA, CaixaBank, Sabadell, and Bankinter, all of which have established non-resident mortgage departments and English-language processes.
The single most important feature that makes these banks foreigner-friendly in Palma de Mallorca is their willingness to underwrite income earned abroad and their experience navigating documentation from different countries.
Yes, these banks do lend to non-residents without local residency in Palma de Mallorca, though you should expect slightly stricter LTV limits, more documentation requirements, and potentially a small premium on your interest rate compared to what Spanish residents receive.
We actually have a specific document about how to get a mortgage as a foreigner in our pack covering real estate in Palma de Mallorca.
What mortgage rates are foreigners offered in Palma de Mallorca in 2026?
As of early 2026, foreigners buying property in Palma de Mallorca can expect fixed mortgage rates typically ranging from 3.2% to 4.0%, while variable rates are usually structured as Euribor (12-month) plus a spread of around 1.0% to 1.8%.
The typical difference between fixed and variable mortgages in Palma de Mallorca is that fixed rates give you payment certainty but start higher, while variable rates may be cheaper initially but expose you to interest rate movements over the life of the loan.
We made this infographic to show you how property prices in Spain compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
What will taxes, fees, and ongoing costs look like in Palma de Mallorca?
What are the total closing costs as a percent in Palma de Mallorca in 2026?
In Palma de Mallorca in 2026, the typical total closing cost for a resale property is around 11.5% of the purchase price, while new-build properties run closer to 12.5% due to a different tax structure.
The realistic low-to-high range for closing costs in most standard transactions in Palma de Mallorca is 10% to 13%, depending on the purchase price (which affects the progressive tax rate) and whether you use additional professional services.
The specific fee categories that make up closing costs in Palma de Mallorca include transfer tax (ITP) or VAT plus stamp duty (IVA + AJD) depending on whether the property is resale or new, notary fees, Land Registry fees, and legal or administrative (gestoría) fees if you use them.
The single biggest contributor to closing costs in Palma de Mallorca is transfer tax (ITP) for resale properties, which starts at 8% for the first 400,000 euros and increases for higher price brackets under the Balearic tax schedule.
If you want to go into more details, we also have a blog article detailing all the property taxes and fees in Palma de Mallorca.
What annual property tax should I budget in Palma de Mallorca in 2026?
As of early 2026, a typical annual property tax (IBI) budget for a standard home in Palma de Mallorca ranges from around 600 to 1,800 euros per year, though higher-value properties can pay more.
Annual property tax in Palma de Mallorca is assessed by applying the municipal IBI rate of 0.445% to the cadastral value of the property, which is an administrative valuation usually much lower than the market price you actually pay.
How is rental income taxed for foreigners in Palma de Mallorca in 2026?
As of early 2026, foreigners earning rental income from property in Palma de Mallorca are taxed under IRNR (non-resident income tax), with a rate of 19% for EU/EEA residents who can deduct allowable expenses, and 24% for non-EU residents taxed on gross income.
The basic filing requirement for foreign owners in Palma de Mallorca is to submit quarterly or annual tax returns using Modelo 210 through the Spanish Tax Agency, even if you live abroad and never set foot in Spain during the year.
What insurance is common and how much in Palma de Mallorca in 2026?
As of early 2026, typical annual home insurance premiums in Palma de Mallorca range from around 250 to 600 euros for an apartment and 600 to 2,000 euros or more for a house or villa, depending on size, rebuild value, and coverage options.
The most common type of property insurance coverage that owners carry in Palma de Mallorca is combined buildings and contents insurance, which protects against fire, water damage, theft, and liability claims.
The biggest factor that makes insurance premiums higher or lower for the same property type in Palma de Mallorca is the rebuild value and whether you have additional features like a pool, high-value contents, or a location in a flood-prone or coastal-exposure area.
Get the full checklist for your due diligence in Palma de Mallorca
Don't repeat the same mistakes others have made before you. Make sure everything is in order before signing your sales contract.
What sources have we used to write this blog article?
Whether it's in our blog articles or the market analyses included in our property pack about Palma de Mallorca, we always rely on the strongest methodology we can … and we don't throw out numbers at random.
We also aim to be fully transparent, so below we've listed the authoritative sources we used, and explained how we used them and the methods behind our estimates.
| Source Name | Why It's Authoritative | How We Used It |
|---|---|---|
| BOE - Ley 22/1988 de Costas | Spain's official consolidated text of the national coastal law. | We used it to explain coastal restrictions near Palma de Mallorca's shoreline. We referenced it for guidance on public domain zones and building limitations. |
| BOE - Decreto-ley 4/2025 (Illes Balears) | Official publication of the Balearic decree on tourist rental enforcement. | We used it to explain why tourist rentals are heavily regulated in Palma de Mallorca. We highlighted it as the source of enforcement powers against illegal rentals. |
| La Moncloa - Golden Visa End | Official Spanish government communication on national legal changes. | We used it to confirm the Golden Visa ended on April 3, 2025. We referenced it to guide readers toward realistic residency pathways. |
| Spanish Police e-Office - NIE Assignment | Official procedure page for the foreigner identification number. | We used it to explain how foreigners obtain a NIE before buying. We confirmed that applications can be made from abroad via consulates. |
| AEAT - IVA vs ITP Guidance | Spain's official tax authority explaining which tax applies to property purchases. | We used it to distinguish between resale (ITP) and new-build (IVA + AJD) tax treatment. We anchored our closing cost estimates on this official framework. |
| AEAT - Non-Resident Rental Income | Official tax guidance for foreigners with Spanish property income. | We used it to explain how rental income is taxed for non-residents. We referenced it for the IRNR rates and deduction rules. |
| AEAT - Modelo 210 Instructions | Official filing instructions for the main non-resident tax form. | We used it to explain the practical compliance steps for foreign landlords. We grounded our filing guidance on this official source. |
| Banco de España - Mortgage Benchmark Rates | Spain's central bank publishing official reference rates for mortgages. | We used it to anchor our January 2026 mortgage rate estimates. We cross-checked these benchmarks against reported bank offers. |
| Spanish Notaries Council - Buying Steps | Official guide from Spain's notarial system on property transactions. | We used it to map the step-by-step buying process in Palma de Mallorca. We explained the notary's role based on this official brochure. |
| College of Registrars - Sale Registration | Official body explaining how property sales are registered in Spain. | We used it to explain why registration at the Land Registry matters. We built our "don't skip registration" guidance from this source. |
| Palma City Council - IBI Ordinance | The municipality's official ordinance setting the local property tax rate. | We used it to provide Palma-specific annual property tax estimates. We quoted the exact 0.445% urban IBI rate from this document. |
| INE - House Price Index | Spain's official national statistics institute for price data. | We used it to provide market context for Balearic Islands price trends. We anchored any price-trend references on this methodology. |
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of Spain. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.