Mallorca holiday rental Licence: ETV explained

Owning a rental property in Mallorca is a highly lucrative investment and a lifelong dream for many. The island’s breathtaking scenery, rich culture, and constant influx of tourists make it a prime location for generating vacation rental income. These opportunities offer the chance to enjoy the idyllic Mediterranean lifestyle while generating rental revenue. It’s the perfect blend of property investment and owning a piece of paradise.

However, due to a governmental moratorium on tourist rental licences until at least 2026, the issuance and transfer of new licences are frozen. Properties with existing holiday rental licences are a hot commodity, making them more sought after than ever. Still, the best way for anyone interested in tapping into the lucrative tourist rental market is by purchasing a property that already holds a tourist rental licence.

Such properties grant immediate access to the rental market without the uncertainty or delays of trying to obtain a licence independently. In this regulatory environment, buying a property with an existing ETV licence is the only viable route to participate in the profitable holiday-letting sector.

In Mallorca, a Tourist Occupancy Licence, known as “plaza turística,” determines the number of guests a property can legally accommodate. These plazas are essential for operating a holiday rental property on the island. You cannot rent your home for less than a minimum period of 1 month without an ETV outlining the number of “plazas” that you have received from the Mallorcan government.

Plazas turísticas in Mallorca

The Consorcio de Mallorca sets the legal rental price based on established rates and the property’s legal occupancy capacity. Property owners must pay for the number of “plazas” (occupancy spots) permitted by their certificate of occupancy, regardless of how many rooms they rent out.

For instance, if an owner has a 5-bedroom property that can accommodate 10 people but chooses to use one bedroom for storage, they must still purchase licenses for all ten plazas. This rule is strictly enforced to ensure compliance with local regulations.

Moratorium on rental licences

There is still an active moratorium on obtaining a holiday rental licence in Mallorca. In the current scenario, individuals who own properties cannot obtain an ETV licence unless there is a change in the law by the new government. For those looking to purchase a rental property, it’s essential that there is already a valid ETV licence in place.

At present, there are two primary options for renting out a property in Mallorca for prospective buyers.

Purchase a property with an existing ETV licence

Investing in a vacation rental property in Mallorca is a decision that promises a solid return on investment but expect to pay a premium of potentially 20% more. Despite high demand and initial costs, these properties are worth it due to their potential for substantial rental income. With the island’s popularity as a tourist destination, owning a rental property here ensures a steady stream of guests and consistent revenue.

Given the current moratorium on new ETV licences, the only way to legally rent out a property for short-term tourist stays is to buy a property that already has a valid ETV licence. Properties with these licences are highly coveted due to their scarcity and will command a higher price. This is still a prime way to secure a lucrative investment while enjoying the benefits of having a Mallorcan rental property.

Rent your property for longer than one month

Each summer, tourists flock to Mallorca to enjoy summer’s long, sunny days. The demand for longer-term accommodation soars, driven by families seeking extended stays to fully enjoy what the island has to offer. If you don’t have an ETV licence, you can still rent your property for longer-term stays of one month or more. This approach targets tenants like digital nomads and remote workers as well.

Demand for holiday rentals far exceeds supply, especially in the lucrative months of July and August. Having a rental license is less critical during this peak period. It is common to organise the rental agreement using a private contract.

Navigating the complexities of holiday rentals in Mallorca requires a deep understanding of local regulations and legal requirements. To ensure compliance and smooth operations, it’s advisable to enlist the expertise of a lawyer or a reputable rental management company familiar with local regulations. With their knowledge and experience, they can guide property owners through the licencing process.