If you’re searching for property in Spain, you may be wondering what makes Mallorca such a popular location for luxury homeowners.
Mallorca is the largest of Spain’s Balearic Islands, and once you’ve arrived here, the appeal becomes clear. Between the island’s Mediterranean charm, international connectivity, and quality of life, it’s no wonder its real estate market is so strong.
In addition to the Mediterranean climate and varied landscape that includes beaches as well as mountains, Mallorca is also a safe and tranquil place to call home.
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Who Is Buying Luxury Property in Mallorca — and Why?
Luxury property buyers in Mallorca come from all over, including Canada, Germany, the Middle East, Scandinavia, the UK, and the U.S. According to the CEO of Berkshire Hathaway HomeServices Nova Mallorca, Jorge Forteza, “The German market remains the leading market for luxury homes,” with the UK and Scandinavia following behind.
There are all sorts of reasons that luxury buyers opt to move to Mallorca. Some may be interested in preserving their wealth and want to invest in a sought-after market. Others may be after a different kind of lifestyle, especially if they have flexibility due to remote work or are in their retirement years.
Mallorca is also an ideal place for a dual-use investment property, where you can live in it part-time and rent it out the rest of the year.
Mallorca Has a Strong and Demanding Property Market
Low inventory levels are common in Spain’s most popular regions, and Mallorca is counted among them. According to the Berkshire Hathaway HomeServices 2025 European Summer Report, since 2013, the volume of new housing has seen a major decline, which has led to increasing costs.
The luxury real estate market is continuing on an upward trend, as it has for the last 5 years, according to the Berkshire Hathaway HomeServices Global Luxury Landscape Report for 2024-2025. Along with ever-growing demand, the low inventory and high pricing have created an urgent market. That means that it’s always better to buy now rather than wait.
There are also rental opportunities, especially if you buy an investment property in a tourist hotspot like Deià, Palma or Puerto Portals. Returns can be as high as €15,000 a week in these areas.
Make sure to look into the current state of the Estancia Turística en Vivienda (ETV) license, which is required for legally renting out a property for short-term stays. You must also meet other requirements, such as having an energy certificate and owning a home in a permitted zone.
Which Areas in Mallorca Offer the Best Luxury Real Estate Opportunities?
The luxury real estate market in Mallorca has incredible apartments, estates and villas, often with sea views. Second homes here are especially popular. And those looking for a first-time home tend to prefer locations closer to the city centre.
Prices vary greatly in different parts of the island, and home type also has a significant effect on price.
For example, the average price for a home in Son Vida is approximately €5 million. In Pollensa, a northern town on the island with mainly 17th- and 18th-century homes, pricing is around €1.5 million on average. Additionally, a high-end apartment may be €800K, while a villa can cost as much as €15 million.
Son Vida
Son Vida is Mallorca’s most famous and luxurious neighborhood, often being called the area’s Beverly Hills. Known for its ultra-exclusive hillside estates, you’ll be treated to golf course and sea views.
Southwest Coast
For beachfront living and access to prestigious marinas, consider a home in Bendinat, Port d’Andratx, or Puerto Portals. Revered for its natural beauty, Southwest Mallorca has white sandy beaches, world-class golfing and incredible cuisine.
Pollensa and Deià
For a serene setting with rustic charm and a mountain landscape, search for property in Pollensa or Deià. Both areas also have strong rental appeal, especially with renters looking for a rural setting.
Palma
Palma is the capital of Mallorca as well as the Balearic Islands. This cosmopolitan city offers an urban lifestyle along with historic flair. Ask your property agent about luxury penthouses in the area to be close to the vibrant city life.
What Property Types Are Most Popular with Luxury Buyers?
From estates teeming with history to modern villas with every amenity you can imagine, luxury buyers are drawn to Mallorca’s diverse range of properties that combine style with substance. In-demand property types include:
- Historic fincas and renovated country estates
- Villas with contemporary designs, gorgeous pools, and unbeatable sea views
- Penthouses and high-end apartments, particularly in Palma
- Smart homes with eco-certification and seamless home automation
Sustainability and technology play a big role in today’s real estate market in Spain. There’s a high demand for eco-friendly homes, with sustainable properties selling for 15% to 20% more than comparable properties without those features.
ESG-driven investors, meaning those looking for Environmental, Social, and Governance characteristics, and remote workers often want features like natural materials, solar panels, and water recycling systems.
What Are the Legal Requirements and Key Documents Needed to Buy Property in Mallorca?
There are a few specific requirements to become familiar with when looking to buy property in Mallorca.
First, you’ll need to obtain an NIE Number. This unique number is required identification for foreigners in Spain. You’ll need your NIE number for administrative, legal and tax purposes.
Next, search for an ROAIIB-certified real estate agent. This mandatory real estate register, which stands for Registro de Agentes Inmobiliarios de las Islas Baleares, requires agents to prove their qualifications and suitability to register.
Once you’ve found a home you’d like to buy and your offer has been accepted, the due diligence process will begin. Often conducted by your property lawyer and a technical expert, due diligence includes encumbrance searches, title deed checks, and urban planning reviews.
What Are the Costs Involved in Buying a Luxury Home in Mallorca?
There are various costs to be aware of when buying Mallorca property.
IVA is Mallorca’s Value Added Tax (VAT). This tax applies to new properties or those that have undergone complete renovations by a developer. The buyer will pay 10% IVA on the purchase day.
For resale properties (meaning purchases of existing homes), a Property Transfer Tax, called ITP, applies instead of IVA. This tax must be paid within 30 days of signing the deed. ITP follows a tiered system:
- Up to €400,000: 8% ITP
- €400,001 to €600,000: 9% ITP
- €600,001 to €1,000,000: 10% ITP
- €1,000,001 to €2,000,000: 12% ITP
- Over €2,000,001: 13% ITP
For example, if you buy a home for €2.5 million, here’s how ITP would be calculated:
- 8% up to €400,000, which equals €32,000
- 9% for €400,001 to €600,000, which equals = €18,000
- 10% for €600,001 to €1,000,000, which equals €40,000
- 12% for €1,000,001 to €2,000,000, which equals €120,000
- 13% for over €2,000,001, which equals €64,999
For this home, you’d pay the sum of the totals at each tier, which equals €274,999.
Additional costs to consider include annual property tax (IBU), insurance costs, land registry fees, legal fees, notary fees, and potential renovation expenses. In general, it’s smart to budget for 10% to 13% above the purchase price to cover total costs.
Why Should You Invest in Mallorca’s Luxury Market Today?
The projected year is expected to be a strong one for luxury real estate in Mallorca.
Right now, it’s a buyer’s market in Mallorca, which leaves room for negotiation. Many sellers expect this and have even set a negotiation margin for themselves. Overall, it’s easier for Mallorca property buyers to close sales than for sellers right now.
However, for the most negotiation leverage possible, it’s best to secure pre-approval for a mortgage first. Most non-residents buying property in Spain can take out a mortgage for 60% to 70% of the purchase price.
Whether you’re looking for property to improve your lifestyle or make an investment, Mallorca’s most popular property types are desirable to even the most discerning buyers.
By hiring an experienced property agent, you can plan ahead and avoid common pitfalls. From defining your lifestyle goals and budget to obtaining the required documentation and knowing the additional costs to expect, having an agent at your side can make the process run smoothly.
HOMEHUNTS property agents are able to select beautiful, luxury Mallorca 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 Mallorca to fit your requirements.
Search our website and browse the selection of luxury homes that we have on offer. You can also speak directly to one of our property consultants by calling +33 (0)970 44 66 43.
