Officials on Spain’s Balearic Islands want to ban non-residents from buying property as soaring prices in Mallorca, Menorca and Ibiza drive local people out and create “ghost villages” of empty homes.
Such a move could make it impossible for foreigners to buy a holiday home in the archipelago. It follows a similar scheme in Canada, which introduced a two-year ban on property purchases by non-residents, with exceptions made for immigrants and legal residents.
Juan Pedro Yllanes, the Balearic vice-president, has said “we should follow Canada’s example” and asked the Spanish government to put pressure on the EU to allow the islands to impose a similar ban.
Francina Armengol, the Balearic president, earlier said: “Many European and other citizens can afford property at prices that are impossible for the citizens of these islands.”
Yllanes acknowledged a ban would conflict with the European principle of free movement. However, there are precedents, in the Austrian Alps for example, where the EU has recognised areas of cultural significance or natural beauty that should be protected from “excessive outside pressure”.
Another precedent is the Aland Islands in Finland, where there are limits on buying second homes. In Croatia, EU citizens must be residents for 10 years before they can buy agricultural land.
The Balearics government also wants Madrid to curb house prices by declaring the islands a “stressed area”, defined as a place where rent or the cost of a mortgage exceeds 30% of the average local income.
Property prices in the islands held firm through the 2008 financial crisis and then the pandemic, with homes in Mallorca and Formentera among the most expensive in Spain.
The village of Deià in western Mallorca has been a favourite among the British since the poet Robert Graves made his home there in the late 1920s. The village forms part of Unesco’s Serra de Tramuntana world heritage site mountain range.
At €6,091 (£5,405) a square metre, property in Deià is the second most expensive in Spain. The estate agent Engel & Völkers is offering a “cosy” two-bedroom house in the village for €1.6m.
As well as being among the most expensive, foreign property purchases on the Balearic Islands far exceed the rest of Spain. According to the national statistics office, foreign buyers accounted for 38.95% of purchases in the Balearics in 2022, compared with a national average of 12.61%.
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Of Deià’s 700 homes, 200 are empty, with 37% of all properties in the village foreign-owned, 23% by Britons.
The local authority has doubled the council tax on empty properties but it is unlikely to have much impact on their wealthy owners.
As local residents are driven out and homes are left empty for much of the year, there is less custom for bars and restaurants. Hoteliers and restaurateurs also complain they struggle to attract staff from the mainland because rents are too high. In Deià, there are twice as many tourist apartments as there are to rent.
