Why invest in Majorca?

Majorca has established itself as an attractive location for investment for several reasons, especially in the property sector. The island is characterised by a number of advantages. These include a stable political and legal framework that offers investors and companies a high degree of security. In addition, companies and private individuals benefit from favourable economic conditions and advantageous tax regulations, which make the location particularly attractive.

Political and legal stability

Spain is a social and democratic constitutional state with a stable political structure. The purchase of property is clearly regulated: While preliminary contracts can be concluded privately, a notarised contract is required for entry in the property register. Spanish law also protects good faith with regard to entries in the property register. There are numerous international lawyers and tax consultants on the island who can assist with the purchase process and thus offer additional security.

The value of property

Property prices in Majorca have been rising steadily since the 1990s, as demand for holiday properties and second homes continues to be high. International buyers in particular appreciate the island’s exclusive location, Mediterranean climate and high quality of life. Due to the limited supply of land and properties and Majorca’s unbroken appeal, investors are experiencing a stable increase in value, which makes the location particularly lucrative. According to the CRES (Centre of Real Estate Studies), average prices have risen by 55% across the island since 2015 and by as much as 78% in Palma. This development underlines the sustained value stability and attractiveness of Majorca as an investment destination.

Tax advantages

The Balearic government has increased the wealth tax to high tax-free amounts and largely abolished inheritance and gift tax for direct relatives. Specifically, the tax-free amount for wealth tax has been increased to 3 million euros. A married couple with two children can therefore jointly utilise an allowance of 12 million euros. With regard to inheritance and gift tax, transfers between parents and children, grandparents and grandchildren as well as spouses will be tax-free in future, regardless of the amount, provided that the persons involved are registered as tax residents in the Balearic Islands. These regulations also make investments in Majorca extremely attractive from a tax perspective. Support programmes for sustainable and innovative projects offer financial support and tax incentives for investors who invest in environmentally friendly construction methods, renewable energies or technological innovations in the real estate sector.

Attractive financing options

Current interest rate situation:

The Euribor, the reference interest rate for mortgages in Europe, has fallen significantly in recent months. In December 2024, the average 12-month Euribor was 2.43%, which represents a significant decline compared to the previous year. Current data from February 2025 shows a further slight decline to 2.394 %. This development leads to lower lending rates and therefore offers attractive financing options for property buyers.

Recommended equity capital:

It is generally recommended to finance at least 20 % to 30 % of the purchase price and ancillary acquisition costs from your own capital. This practice improves the credit conditions and reduces the financial risk. Some financial experts even recommend providing up to 40 % equity in order to obtain even more favourable conditions.

Infrastructure and accessibility

Mallorca’s infrastructure and accessibility play a decisive role in the island’s attractiveness for investors. A well-developed infrastructure not only facilitates tourism, but also creates ideal conditions for businesses and property investments.

Excellent accessibility

• Palma de Majorca International Airport: One of the busiest airports in Europe with numerous direct connections to major cities in Europe
• Short flight times: Majorca can be reached in around 2 hours from many major European cities, making the island particularly attractive for weekend and second home investors
• Modern harbours: Palma and other coastal towns have first-class marinas that promote luxury tourism and maritime investment

High-quality infrastructure

• Well-developed roads & transport network: Fast connections between cities and tourist hotspots facilitate mobility and logistics
• Healthcare: Ultra-modern hospitals and private clinics also make the island interesting for health and wellness tourism
• Educational opportunities: International schools and universities attract foreign families and digital nomads
• Digital infrastructure: Improved fibre optic expansion and coworking spaces create ideal conditions for remote workers and companies

Effects on investments

• Property market: Easy accessibility increases demand for holiday flats, luxury villas and commercial properties
• Economic growth: Reliable infrastructure promotes business development in the tourism, catering, retail and service sectors
• Logistics & trade: The modern harbour and transport infrastructure facilitates investment in trade, import/export and the maritime economy

Majorca’s excellent accessibility and well-developed infrastructure make the island not only an attractive holiday destination, but also a stable and future-proof investment location.

Strong tourism industry

Majorca has one of the strongest tourism sectors in Europe, which can be attributed to several factors:

• Year-round destination: Thanks to the Mediterranean climate, the island attracts numerous visitors not only in the high season, but also in winter.
• Excellent infrastructure: A modern international airport, well-developed roads and an extensive range of hotels and restaurants ensure a smooth journey and a pleasant stay
• Wide range of leisure activities: In addition to gorgeous beaches, Majorca offers numerous sporting opportunities such as golf, cycling and water sports as well as cultural highlights, historical sights and a vibrant nightlife
• Popular with international tourists: German, British and Scandinavian holidaymakers in particular are regular visitors, which ensures constant demand
• High-quality gastronomy and luxury segment: In addition to traditional restaurants, the range of upscale restaurants, beach clubs and boutique hotels is growing, attracting discerning travellers

International investment and market attractiveness

Majorca attracts investors from all over the world, including Europe, Asia and America. This international interest is an indicator of the confidence in the island’s luxury property market. Investors are not only looking for property, but also for a slice of Mediterranean culture and lifestyle. The construction of new luxury complexes, including bespoke villas and high-end appartments, is booming.

Conclusion

The combination of political and legal stability, sustainable value growth in the property sector, attractive tax benefits, good financing options and international investor interest makes Majorca an extremely attractive location for investment. These factors offer investors not only financial security, but also the opportunity to invest in a region with a high quality of life and steady growth potential.