Palma’s transformation from a charming island to a global lifestyle destination has led an increasing number of luxury buyers to consider property in Mallorca’s capital.
Combining a vibrant cosmopolitan setting with Mediterranean beauty is appealing to visitors and investors from all over, and there has been consistent real estate demand from European, UK, and U.S. buyers.
In this article, we’ll explore what makes Palma so desirable and what you should know about purchasing investment property in the heart of Mallorca.
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What Makes Palma Stand Out from Other Spanish Cities?
There are a number of characteristics that set Palma apart from other cities in Spain, such as:
- Climate: Thanks to its position on the Mediterranean Sea, the city experiences over 300 days of sunshine each year.
- Connectivity: It’s easy to catch year-round international flights to and from Palma, particularly from major cities throughout Europe.
- Safety and Stability: Palma is known for its dependable infrastructure, including reliable healthcare, and the city is also a low–crime
- Size and Scale: The compact, highly livable city of Palma has the feel of a European capital without the chaos that often comes with it.
Overall, Palma offers a well-balanced lifestyle, combining beach access with cultural richness and a strong local identity.
Which Areas of Palma Are Most Popular with Luxury Buyers?
Palma is an excellent destination if you’re looking for a walkable city that’s brimming with culture and all of the urban amenities and conveniences you’d expect. Let’s go over some of the most sought-after areas for luxury property buyers in Palma.
Palma’s Old Town
Also referred to as El Casco Antiguo, the city’s Old Town is the place to visit for cathedral views and exploring historic buildings along the cobbled streets. High-end renovations are common here, and available property types include designer apartments, townhouses, and palacetes.
Santa Catalina
The creative, bohemian neighborhood of Santa Catalina has a strong international scene, and you can spend the afternoon perusing the local boutiques and food markets. The hip area is especially popular with expats and younger buyers.
Son Vida
This gated hillside enclave is known for having ultra-luxury villas with panoramic views, as well as pristine golf courses and 24/7 security. While it’s set apart from the city (ideal if you’re after privacy), you’ll only be a 10-minute drive from the centre.
Portixol and El Molinar
For waterfront living just minutes from the city centre, consider a property in Portixol or El Molinar. Between modern apartments and refurbished fishermen’s houses, you’ll be able to find a home with plenty of character here. Plus, the area is very popular with tourists, which is great news if you plan to rent out your property.
Son Armadams
Set just below the Gothic-style Bellver Castle, between Santa Catalina and El Terreno, you’ll find the leafy, residential neighborhood of Son Armadams. The area is quiet while still being central, and common property types here include renovated apartments, penthouses, and a small selection of detached homes. Son Armadams is quickly gaining popularity thanks to its walkability, green spaces that are perfect for hiking or jogging, and proximity to the marina.
Puig de Ros
Located just south of Palma, about 20 minutes from the city and the airport, is the rocky beach of Puig de Ros. The area has modern villas and seafront properties that offer more space and privacy than you’ll find in central Palma, and homes here appeal to families and any buyer after a great value. Offering tranquility as well as city access, properties here are a tempting alternative to those in pricier central locations.
What Is It Like to Live in Palma Day-to-Day?
- Access and Walkability: Most parts of Palma are compact and easy to navigate on foot or by bike, so you won’t have to depend on your car.
- Arts and Culture: Palma hosts all sorts of events year-round, including concerts, exhibitions, festivals, and galleries.
- Beaches and Outdoor Life: You can enjoy a vibrant life in the city while still being steps from the sea and other outdoor activities.
- Cafés, Restaurants, and Markets: Foodie culture in Palma is a blend of local tradition and international influence.
- Local Services: There are a variety of services in the area that cater to different needs, from international schools and private healthcare to luxury retail options.
How Strong Is the Property Market in Palma?
Palma has proved to have resilient pricing and even growth during periods of global uncertainty. Moreover, having a limited supply of properties in historic districts adds to the area’s exclusivity and protects the long-term value of homes. The 2025 European Summer Report by Berkshire Hathaway HomeServices shows that the volume of new properties has been on a major decline since 2013, leading to increasing demand and costs.
Additionally, there are strong rental markets for both short- and long-term rentals. And while legal rental licenses for apartments are rare, they can be exceedingly valuable if you’re able to secure one.
Furthermore, when compared to other popular Mediterranean cities, such as Monaco or Nice, Palma offers a better value. And there’s an especially high demand in Palma for properties with character that have undergone high-quality renovations.
How Does Palma Work for Second Homeowners and Remote Professionals?
Second-home buyers in Palma can rest assured that their property will be safe thanks to trustworthy property management services. Having a home that’s so easy to lock up and leave in the hands of professionals makes it possible to come and go as you please, using the property when you like and renting it out the rest of the time.
You and your renters will also have fast access to the Palma de Mallorca Airport, which is about 20 minutes away from most neighborhoods in the area.
For remote workers or semi-residents who are at their Palma home part-time, the city has strong WiFi connections, good expat support networks, and coworking spaces to take advantage of. Palma is also in a friendly time zone that’s convenient for conducting business across Europe and beyond.
Overall, Palma offers a seamless lifestyle for those who are renting out their property, working remotely, or splitting time between countries.
What Legal and Practical Considerations Should Buyers Know?
There are various property taxes and fees to be prepared for when buying property in Palma, such as:
- IVA: This is Mallorca’s Value Added Tax (VAT), and it applies to new properties or those that have been completely renovated by a developer. The buyer pays 10% of the purchase price in IVA.
- ITP: The Property Transfer Tax in Palma is for resale properties (as opposed to the IVA), and the tax percentage follows a tiered system based on the price of the home.
- Additional Costs: Expect to pay IBU (annual property tax), insurance costs, land registry fees, legal fees, and notary fees.
A good rule of thumb is to budget for 13% of the purchase price to cover additional costs.
When it comes to buying a short-term rental property, consider the Estancia Turística en Vivienda (ETV) license. There are additional requirements that investment buyers must meet, too, such as purchasing a property in a permitted zone and having an energy certificate for the home.
It’s smart to work with local experts, including property, legal, and tax advisors, who are highly familiar with the luxury property market in Palma.
Final Thoughts: Is Palma the Right Choice for Your Next Property?
Palma offers a unique and intriguing balance of character, desirable climate, urban convenience, and asset appreciation. Aside from being an in-demand holiday destination, the capital of Mallorca is also a serious and well-founded option for luxury living year-round.
Work with a trust local expert to find the right property and neighborhood to meet your goals. A property agent will also help you understand Spain’s unique real estate regulations, especially for expat buyers. Plus, you’ll have VIP access to off-market properties that other buyers can’t view.
HOMEHUNTS property agents are able to select beautiful, luxury Palma property based on your specific search criteria. Whether you want to live in the middle of the city or in a more tranquil setting, there is property in Palma and the surrounding area that will fit your needs. Search our website and browse our selection of luxury homes. You can also speak directly to one of our property consultants by calling +33 (0)970 44 66 43.
