It is one of the questions we hear most often in the office: “what if I let it when I'm not using it?” The short answer is that yes, it can go a long way towards paying the costs of a house in Mallorca — but it rarely turns the purchase into a high-yield investment. These are the numbers we run with our buyers, without the gloss.
First: no licence, no holiday letting
To let a home to tourists in the Balearics you need a registered ETV licence, with its number shown in every listing. Getting a new one in Mallorca is almost impossible today: new places have been restricted for years and, since April 2025 (Decree-law 4/2025), they are banned in apartment buildings. Since 1 July 2025, platforms also require the number from the national short-term rental register (Royal Decree 1312/2024). In practice, anyone who wants to let buys a house that already has a licence — and pays for the licence in the price.
Seasonal letting by the month rather than the week is not an alternative: it is not a tourist activity and does not allow holiday stays to be advertised.
Income: the season and the weeks
In the south-east, the main season runs from May to October, with July and August as peak months. What counts is not the price of an August week but how many weeks are actually let each year, and at what average price. When a house for sale boasts about its returns, ask for the statements from previous seasons from the platform or manager: those are data, not projections.
The costs people forget
- Commissions charged by platforms or booking agencies.
- Management: if you don't live here, someone has to welcome guests, sort out problems and coordinate cleaning; it is usually paid as a percentage of income.
- Cleaning and laundry at every changeover.
- Utilities, pool and garden, which soar when the house is occupied.
- IBI, rubbish fee and insurance that covers tourist use.
- Maintenance and replacements: a let house wears out faster than a lived-in one.
The ecotasa (sustainable tourism tax) is paid by guests per person per night, but it is collected and declared by whoever operates the property. And as long as no hotel-type services are provided, holiday lets carry no VAT.
A worked example
Take a four-bedroom villa with a pool and an ETV licence, bought for €1.5M. With purchase taxes and costs (around 12 %), the real investment is about €1.68M. Let for 14 weeks at an average of €4,500, it brings in €63,000 a year: 4.2 % gross on the price. Annual costs would be roughly:
- Commissions (15 %): €9,450
- Full management (20 %): €12,600
- Cleaning and laundry (14 changeovers): €3,500
- Utilities, pool and garden: €6,000
- IBI, rubbish fee and insurance: €3,000
- Maintenance and replacements: €4,000
That leaves about €24,450 before tax: 1.5 % on the money invested, or 2.2 % if you handle the management yourself. These are reasonable assumptions for the area, not a promise: every house has its own track record, and a few weeks more or less change the result a lot.
A holiday licence rarely makes a house rich. What it does is make the house pay for a good part of itself.
Tax on rental income
A non-resident owner declares rental income on form 210. EU or EEA residents pay 19 % on net income and can deduct the costs of the days let: in our example, simplified, about €4,650. Residents elsewhere pay 24 % on gross income with no deductions: about €15,100, more than half the profit. Spanish tax residents include it in their income tax (IRPF). For the days the house is not let, non-residents still pay tax on imputed income. Run these numbers with a tax adviser before you buy, not after.
When it makes sense
Buying with a licence makes sense when you like the house for yourself, letting covers a good share of its costs and a well-documented licence supports its value when you sell. Buying for the yield alone, on the other hand, tends to disappoint. Before you make an offer, review the licence file — our ETV guide explains how — and ask for the real figures from recent seasons.
