The Balearic Islands Parliament has formally rejected a proposal to ban non-residents from buying property in the archipelago, including Mallorca, Menorca, Ibiza and Formentera.
The initiative, promoted by a minority party, did not obtain the necessary support to begin the legislative process. As a result, there will be no ban in force and no process underway to limit the purchase of properties by British citizens or any other non-resident home purchasers on the Balearic Islands.
In response to the concern generated in some UK media, the Balearic Association of Real Estate Agencies (ABINI), an organisation that brings together 15 leading brands and 35 partners, with a total of 450 estate agents, has sought to convey a clear message of reassurance.
ABINI Chairman Daniel Arenas stated: ‘The proposal was debated and clearly rejected by Parliament. The legal framework has not changed, and the Balearic property market remains open to international buyers. Legal certainty is fully guaranteed by Spanish legislation and European Union law.’ ABINI emphasises that the institutional system has functioned normally and that the parliamentary result reinforces the regulatory stability of the market.
‘We understand that some headlines may have raised doubts among British buyers. That is precisely why it is important to clarify that there are no legal restrictions or changes affecting the purchase of property by non-residents. The rules remain the same as they have been for decades.’ The United Kingdom has historically represented one of the most important international communities in the Balearic Islands, both in terms of permanent residence and second home purchases.
ABINI does not deny that demand from non-residents, which also includes residents from the Iberian Peninsula, influences prices, but this is clearly not the only factor. In the past 25 years, there has been no adequate response in terms of supply to the 50% increase in population on the Balearic Islands, the creation of new building land has been literally blocked, and the fact that it is necessary to generate affordable housing for residents has been ignored. Unfortunately, Spain also holds one of the lowest rates of social housing with less than 2%, whilst the average in Europe is 7 – 9% and the Netherlands even reach a share of 30%.
The association also points out that the real estate sector is an important pillar of the Balearic economy, generating activity in construction, architecture, renovation, legal services and many ancillary sectors. Daniel Arenas states that: ‘A ban on non-resident purchases would not generate a single affordable home, but it would certainly damage the local economy and significant part of the tax income which the Islands need.’
The Conservative Government of the Balearic Islands has taken a head-on approach in solving the housing challenge by creating a new figure of affordable homes reserved for residents with a minimum of five years of permanent stay on the islands. In addition, an administrative simplification decree will dramatically shorten the planning process for new building land and 50% of this will be reserved for residents. In total the Balearic Islands housing emergency action plan already has 7.000 units for residents underway, a special of 228 M € approved for strongly increasing social housing supply and further 10.000 affordable housing units in public-private collaboration lined up.
‘The approach in how to tackle the housing challenge could not be more different in Spanish Autonomous Communities: whilst socialist ruled Catalunya has tightened the already restrictive real estate laws even further, the conservative Balearic Islands Government defends the position of generating supply where needed, without intervening the market,’ says Daniel Arenas.
‘Stability and predictability are fundamental to any market. The Balearic Parliament’s rejection of a ban on non-resident purchases sends a clear signal of continuity and respect to international laws, whilst providing confidence and liberty to homeowners,’ concluded Daniel Arenas.
ABINI encourages British buyers to obtain information through official channels and accredited professionals and reiterates that the Balearic Islands remain one of the most established and secure residential destinations in the Mediterranean.
