Long-term Rental in Mallorca: What Owners Should Know

Anyone renting out a property on Mallorca long-term primarily operates within the framework of the Spanish Ley de Arrendamientos Urbanos (LAU). For owners, the most important question is not whether the contract runs for six, eleven or twelve months, but what purpose the use serves: the tenant's permanent main residence or only a temporary stay.

Legal Framework: vivienda habitual or temporada?

The LAU distinguishes between renting as vivienda habitual and renting for another purpose. A vivienda habitual exists when the dwelling meets the tenant's permanent housing needs. In that case, the protective rules of residential tenancy apply, in particular minimum terms, extensions and requirements for deposits, costs and maintenance.

An arrendamiento de temporada is a contract for a time-limited purpose, such as study, temporary work, medical treatment or a clearly defined seasonal stay. A contract does not become a seasonal tenancy simply because it is limited to eleven months. The temporary reason should be specifically stated and verifiable.

Typical Target Groups

In Mallorca, potential tenants include local workers, families, residents, retirees with long-term stays, expatriate professionals and people with stable residency plans. For owners who do not wish to use the property themselves constantly, this target group can be more attractive than a changing seasonal operation: fewer handovers, less vacancy between bookings and more predictable income.

Rental Duration and Extensions

For residential tenancies, the parties may freely agree on the initial term. If the agreed term is shorter than five years, the contract is extended annually in favour of the tenant up to a minimum duration of five years. If the landlord is a legal entity, this minimum duration is seven years. After expiry, the contract can generally be extended annually for up to three years if neither party objects in time.

The tenant may terminate a residential tenancy contract after six months by giving at least 30 days' notice. Compensation in favour of the landlord is only possible if agreed in the contract and legally permissible.

Deposit and Additional Guarantees

For residential tenancies, the statutory deposit is one month's rent; for seasonal tenancies or other uses, it is two months' rent. Additional guarantees may be limited for residential tenancy contracts up to five years or seven years for legal entity landlords. In the Balearic Islands, the rental deposit must be registered and deposited through the competent procedure of the Govern or IBAVI.

Owner Obligations

The landlord must hand over and maintain the dwelling in a condition that allows the agreed residential use. Necessary maintenance repairs are generally at the landlord's expense; minor repairs due to ordinary wear and tear are borne by the tenant. Important are a written contract, inventory, payment receipts, utility cost regulation and a valid energy certificate.

Special Features for Non-Resident Owners

Non-resident owners must declare rental income from Spanish properties in Spain, usually via Modelo 210 under IRNR. For EU, EEA and certain other cases, expenses may be deductible under conditions; for other non-residents, different rules and tax rates apply. A local power of attorney or a reliable representative helps with repairs, official correspondence, tax deadlines and tenant communication.

Advantages, Disadvantages and Risks

Long-term rental offers predictable income, less operational work than short-term changes and lower tourist regulation. The main disadvantage is less flexibility: sale, own use or renovation must be planned early. Payment defaults, unauthorised subletting, damage or delayed eviction proceedings can be reduced through credit checks, clear contracts, inventory, insurance and professional management.

Long-term rental is attractive when owners value stability more than maximum short-term returns. Seasonal contracts are only advisable if the temporary purpose is genuine, documented and consistent in practice.