Is buying property in Mallorca a good investment? Our insights

There are many compelling reasons why buying a property in Mallorca is considered a sound investment: 

Lifestyle appeal 

Mallorca offers 300 days of sunshine a year, beautiful beaches, golf courses, marinas, and the UNESCO-protected Tramuntana mountains. The island has also developed a cosmopolitan culture, with fine dining, art galleries, international schools, and healthcare facilities. This lifestyle attracts not only holidaymakers but also professionals and families relocating permanently. 

Strong property values 

Unlike some mainland Spanish markets, Mallorca’s property values have shown consistent resilience. Even modest apartments in Palma have appreciated steadily, while luxury villas in Son Vida or the southwest have seen significant gains. For many buyers, this stability provides confidence in the island as a long-term investment. 

Rental opportunities 

Tourism is a cornerstone of Mallorca’s economy, and rental demand is high. Investors with properties in the right areas—particularly Palma, Pollença, or the southwest—can achieve attractive yields. Licensed holiday rentals can generate significant income during the summer, while long-term rentals appeal to digital nomads and expats year-round. 

Accessibility and prestige 

The island is just two hours’ flight from most major European cities, and Palma airport’s extensive connections make it easy for second-home owners and tenants alike. Mallorca also carries an international prestige factor: it is perceived as safer and more exclusive than some other Mediterranean islands. 

Diversification 

Owning property in Mallorca allows investors to diversify geographically and in terms of currency. For many European buyers, it represents not only a financial investment but also a lifestyle hedge—a haven to retreat to in uncertain times. 

Buying property in Spain is a straightforward process if you follow the correct steps and engage professionals. 

Key requirements 

• NIE number: Foreign buyers must obtain this tax identification number. 
• Legal checks: A lawyer should verify ownership, debts, licences, and land registry details. 
• Contract process: After agreeing a price, a private contract (arras) is signed, usually with a 10% deposit. 
• Completion: The final deed is signed before a notary, and the property is then registered in your name. 

Costs and taxes 

Allow 10–12% on top of the purchase price for: 

• Property transfer tax (for resales). 
• VAT and stamp duty (for new builds). 
• Notary and registry fees. 
• Legal fees. 

Importance of due diligence 

Particular care should be taken with rural properties, where legality of extensions or outbuildings can sometimes be unclear. Similarly, for apartments, review community rules carefully, especially if you plan to rent the property.

While many investors purchase in cash, financing remains an option for residents and non-residents alike. 

Spanish mortgages 

Non-residents can typically borrow up to 60–70% of the property’s value, while residents may secure slightly higher amounts. Mortgage terms generally range from 15–30 years. 

Interest rates 

Rates are linked to the Euribor. Buyers can choose fixed, variable, or mixed-rate products. Although interest rates in Europe have fluctuated recently, Spanish banks remain competitive. 

Documentation required 

Applicants usually need: 

• Passport and NIE. 
• Proof of income (salary slips or tax returns). 
• Bank statements. 
• For self-employed, company accounts. 

Costs of borrowing 

Beyond the interest rate, factor in: 

• Bank arrangement fees. 
• Valuation fees. 
• Notary and registry costs. 
• Insurance requirements. 

Having pre-approval in place can strengthen your negotiating position when making an offer. 

To ensure your investment is successful, consider the following guide: 

1. Define your goals – Are you looking for capital growth, rental yield, or a lifestyle home? 
2. Research micro-locations – Compare areas and their property values carefully. 
3. Budget realistically – Include taxes, fees, and ongoing costs. 
4. Use professional support – A reputable real estate agency and lawyer are essential. 
5. Think long-term – Buy a property with resale potential, even if you plan to keep it for many years. 
6. Check rental rules – If you plan to rent, ensure the property qualifies for the correct licence. 
7. Visit in person – Experience different areas and properties before committing. 

Conclusion 

So, is buying property in Mallorca a good investment? The answer is yes—if you approach it with careful research and the right professional advice. The island offers a unique combination of financial security, lifestyle appeal, and prestige, making it one of the most attractive property markets in Spain and Europe as a whole. 

Whether you are looking for a luxury villa overlooking the sea, a city-centre apartment in Palma, or a rustic finca surrounded by vineyards, Mallorca has opportunities for every type of buyer. With guidance from Sandberg Estates, you can navigate the process with confidence and secure not just a property, but a long-term investment in your future lifestyle.