Which holiday rental licence should I get and how much will it cost?

Are you thinking of buying a house in Mallorca and letting it as a holiday rental?

You can invest in real estate for the sole purpose of letting it out. Or maybe you could buy the Mediterranean house of your dreams, enjoy it whenever you like and let it pay for itself the rest of the year.

These are all great ideas, tried and tested. Many people purchase property in Mallorca and pay it off by renting it out during the holiday season.

You will however need an ETV Licence from the Tourist Board to rent your home. Without a licence you cannot advertise on Airbnb or any holiday portal or agency website, and not having one risks unleashing the wrath of the authorities in the form of tremendously hefty fines.

In July 2018 the Mallorca rental laws on letting properties to tourists were updated for weekly, daily or short term rentals.

The new law stated that in order to rent a property as tourist accommodation the owners would be obliged to have an ETV rental licence. For a while these became extremely difficult to acquire. The good news is that the Tourist board is now issuing licences again.

Understanding the three rental licences

There are three different kinds of LICENCES: ETV, ETVPL and ETV60.

Choosing your rental licence will depend entirely the type of home and where (the zone) your property is located.

ETV

The most extensive and expensive type of rental licence (ETH365_uni) allows the property owner to let their home out all year round and it is indefinite. You do not have to renew it. Basically, once you have your ETV you can let your house out whenever and for however long you choose. It is also a long-term investment in cost; at 3500€/guest space, you are looking at an eye watering €7000 per double bedroom. A 6-bedroom villa (sleeps 12) will cost 77,000€. Apartments owners cannot apply for an ETV, as it is only eligible for self-standing homes.

Also worth noting is that as a multiple homeowner you are only allowed to have ETV licences for three properties.

ETVPL

The ETVPL is also a year round licence but it is not indefinite – but rather, it has to be renewed every 5 years ( ETH365_pluri). This one differs mostly however in the price; at 875 €/guest space it is a quarter of the price of the full ETV. The pluri in the licence name refers to a property that connects directly with its neighbours, sharing a wall, feature or space with that neighbouring property.

In order to apply, you will need the permission of the other owners, ie: your neighbours. They will have to give their consent to you letting your property.

If you are the owner of a detached property you may not apply for this licence.

ETV60

This licence is in fact two in one, or rather it is two licences, one that applies to self standing properties and the other pluri-family homes, though treated identically. These are a licence that effectively allows you to rent your home for a maximum of 60 days a year. 60 days in the form of 2 full months. Yet, not necessarily consecutive months, and not both July and august sadly either. So, you can choose two months in the year when you will commercialise your home, July or August and one other month. This licence costs 291,67 €/guest space, a third of the cost of the ETVPL and a mere margin (a twelfth to be exact) of the cost of a full ETV. These ETV60s are also 5 year licences which will have to be renewed. If your home is not self standing then you will still need the consent of the other neighbouring home owners.

The bottom line on which licence to apply for is the type of property you have, whether it is 100% private property (ETV or ETV60), like in the case of a free standing villa in the countryside, or if your property shares space or walls with other people (ETVPL or ETV60), for which you will need their consent.

Mallorca's Zones Explained

Now, another factor relevant to this post and to the possibilities you may or not have, as a home owner, or letting your home as a holiday rental, is the question of ZONING.

Mallorca is divided into 12 different and distinct zones, and each zone is governed by specific licensing rules.

At one point in recent years there was an awful scare whereby all apartments were unceremoniously rid of their rental licences, leaving apartment owners without a rental income and at a loss of what to do with their properties along the coast and holiday makers without the beachside accommodation they loved. Fortunately, some apartments can apply for the holiday licence after all.

Now one constant is that all old rental licences remain valid. Therefore, home owners in Mallorca who already had a licence will be able to keep it.

Unfortunately, not all property owners can get a licence. And here is where the zoning laws come in. Some areas are simply not considered to be apt for year-round rental business. Areas which are protected rural land, mountainside, like the Tramuntana or residential areas all fall under these categories. In an attempt to control and manage a previously free for all tourist rental trade, the regional Balearic government has created a complicated set of different licences.

But now we have to look at the zoning laws on the island. Each of these licences is limited to certain zones and in some zones no licences are permitted at all!

The Serra de Tramuntana Mountains on the western coastline of Mallorca are UNESCO protected so here for example the government has decreed some areas as vulnerable interior zones PURPLE (Deia, Pollensa, Port de Valldemossa…), some of the mountain villages are non-saturated LIGHT BLUE zones (Esporles, Bunyola), then there is the protected rustic GREEN zone, which covers most of the mountains and rural land. And finally the ORANGE zone for the coastal areas (Port of Soller…).

Pollensa, which is in the Zone 3 PURPLE only ETV60 are available.

Regardless of the zone and licence you apply for, there are some points worth making here. All properties require an updated Energy Certificate and a living CEDULA DE HABITABILIDAD certificate which states that the property is fit to be lived in.

Alternatively, you can let your property out for longer periods on a monthly basis and then these rules will no longer apply.

Hope this has helped!