ETV licence economics

Is the ETV licence worth it in Mallorca?

What you buy is not “a licence”, but a number of tourist places — in Spanish plazas turísticas, in Catalan places turístiques. Each place is a guest bed that you are legally allowed to rent out, and for a single-family house each place costs €3,500. Whether this pays off is not determined by the price of the places, but by the gap between holiday and long-term rental after tax — and this is exactly the gap that the calculator above works out for you using your own figures.

The most expensive misconception in sales talks

“The licence costs €3,500” — this sentence comes up constantly, and it’s wrong. The amount is the price for one place. A house that, according to its cédula de habitabilidad — the official habitability certificate that sets out the permitted occupancy for each dwelling — may accommodate six people, needs six places. The purchase price is therefore the number of beds multiplied by the price per place, and what seemed like a manageable item quickly turns into a completely different order of magnitude.

The permit itself, on the other hand, costs nothing. It comes into being through the DRIAT (declaración responsable de inicio de actividad turística), a self-declaration through which you notify the authorities that you are starting tourist rental activity and that you meet all the requirements. The declaration itself is free of charge — what’s expensive are the places you must already own before you’re even allowed to submit it.

That’s why the corresponding line in the calculator is called “purchase of tourist places” and never “licence investment”. Anyone who keeps the terms clearly separate also understands the rest of the system: places are a strictly rationed good, while the permit is the administrative act governing them.

The abbreviations you’ll come across in listings and notarial contracts stand for the rental modalities: ETV (estancias turísticas en viviendas) is the tourist rental of a single-family house, ETVPL the same activity in a property under the regime of propiedad horizontal — in other words, where several owners share a building or complex with common areas —, and ETV60the strictly limited letting of your own main residence. Each modality has its own price per licence place and its own requirements.

How it's calculated

The calculator compares two worlds for the same property and the same year: once with holiday letting, once with the alternative you'd have without a licence — long-term letting or no letting at all. For each world, a net cash flow is produced, as follows:

Gross rent minus actual expenses minus tax.The actual expenses include the property's running costs (property tax IBI, insurance, community fees), interest, repairs, and the costs that only arise in the respective scenario: cleaning, laundry and platform commission for holiday letting, agency and management fees for long-term letting. Both scenarios get such a cost field — a cost block only on the holiday side would be a thumb on the scale.

The difference between the two net cash flows is your additional annual return. If you divide the purchase of the licence places, including one-off ancillary costs, by this additional return, you get the payback period: the time after which holiday letting has earned back the cost of the places.

One point in this is more important than it sounds, and it's the point at which most yield calculations go wrong: Depreciation reduces the tax, but it is not an expense.It lowers the tax base — but no money leaves your account. That's why it isn't deducted in the cash flow. Anyone who deducts it anyway makes the letting look systematically poorer and the payback period too long. The calculator treats it the same way in both scenarios, otherwise the comparison would be skewed.

This tool doesn't recalculate the tax itself but leaves that to our calculator for the taxation of holiday letting, which in turn uses the self-use tax. Together, both map out the IRNR, the Spanish income tax for non-residents (Impuesto sobre la Renta de no Residentes). This also includes the imputación de rentas: for every day the property stands empty and is available to you, the tax authorities apply a notional usage value based on the cadastral value. So even an empty house incurs tax — which is why the alternative "no letting at all" rarely comes out as harmless in the comparison as it feels.

The calculator computes for non-residents, for natural persons, for a full calendar year and for the whole property. It only maps the Spanish tax; what your country of residence makes of the income is a different matter and belongs in the hands of your tax adviser. How the figures are put together, you can see in the worked examples directly in the calculator — they move along with the legal situation, which is why no re-typed amounts are deliberately given here in the text.

Two routes to the places: lottery procedure or market purchase

The official price per place is not a retail price. It only applies if you acquire the places from the CBAT, the Consorci Borsa d'Allotjaments Turístics — the body that manages the exchange of tourist places in the Balearics. This exchange is fed exclusively by deregistrations: places that someone gives up go back into the pool. New places are not created.

They are allocated in advertised rounds, according to the current procedure by public lottery before a notary — in Spanish sorteo. So there is no waiting list on which you move up, and no entitlement that patience creates. There is a convocation, an application, and a draw. Anyone not drawn waits for the next round.

The second route is the market: you buy a property that already has its places, and pay a premium for it that is built into the purchase price. What this premium is worth is set by no standard — it is a matter of negotiation and fluctuates with the location, the number of beds, and the impatience of those involved. That's why the calculator includes the second acquisition route: there you enter the amount you actually pay, instead of calculating with an official price that, on this route, you simply won't get.

For profitability, this distinction is decisive. The same property often amortises places from the lottery procedure within a few years, while a high market premium may, under some circumstances, never be amortised — with identical rental income. If someone offers you a finca 'with licence', the question about the premium for the places is the first one you should ask.

Which properties are even still allowed to register

Here the legal situation has shifted fundamentally, and that's the reason many older guides lead you astray. For flats under the propiedad horizontal regime, the submission of new declarations is prohibited throughout the entire Balearics. An ordinary flat in an apartment building can therefore no longer newly register for tourist letting — for it, there is simply nothing to calculate.

Three typologies are exempt from the ban: terraced houses (viviendas adosadas), semi-detached houses (viviendas emparejadas), and detached single-family houses that share a plot with other buildings. For these, the ETVPL modality remains open. Also exempt is the letting of one's own main residence, which is covered in more detail further below.

A single-family house without propiedad horizontal — the classic detached house, the finca on its own plot — is not affected by the ban. It falls under the ETV modality, and the purchase of the places there is final: a compra definitiva, with no expiry date.

It's different for terraced and semi-detached houses under the propiedad horizontal regime. There, the permit is time-limited. It entitles for 5 years from the submission of the activity declaration and must be renewed after that — with a new certificate from the place-management authority confirming that the places are available to you for a further period. The price per place is significantly lower in this modality, namely €875, but you're also not buying a permanent position, only a temporary one.

The calculator draws a conclusion from this that you'll notice: in the temporary modality, it doesn't output an amortisation period that extends beyond the validity period of the licence. Instead, it tells you how much is still outstanding at the end of the term. A figure beyond the term wouldn't be a bad figure, it simply wouldn't exist — the model that produces it no longer applies there, because the places then have to be newly acquired and the conditions of the renewal aren't fixed.

What the calculator deliberately doesn't show

There's a third modality, ETV60: renting out one's own main residence for a maximum of 60 days per year, at the lowest price per place of €291.67. At first glance, this looks like the affordable entry point everyone is looking for. It isn't — at least not for you, if you don't live on Mallorca. The requirement is that the property be the owner's main residence, and a non-resident, by definition, has none on the island. The calculator therefore doesn't offer this modality. Honestly, that's better than showing a calculation based on a requirement that no one in this target group meets.

Also not shown: co-ownership below full ownership. If you only own part of the property, you also have to apply the expenses proportionally — a half-proportional cash flow is the most common source of error in such calculations, and a calculator that silently produces it would be more dangerous than none at all.

And finally, the calculator doesn't factor in a later resale of the places or the costs of a renewal. Both are deliberate decisions in favour of verifiable figures. For you, this means: the stated amortisation period is more of an upper limit than a forecast.

What ties down the places: no refund, no quick transfer

Two rules turn the purchase of the places into a commitment that goes beyond the payment.

First: If you deregister the tourist activity again, you won't get any money back for the places. This is explicitly stated in the Balearic Tourism Law (Art. 91.6 Ley 8/2012). Anyone who buys the places and gives up the letting after one season loses their entire investment. There is a narrow exception if the administration cancels the licence ex officio through no fault of yours; in that case, a proportional refund is made, reduced by a fixed percentage for each month since the declaration.

Second: places from the current temporary pool may 5 years to third parties, calculated from the date of issue of the acquisition certificate. Quick resale to the next interested party is therefore blocked. For your calculations, this means: during this period, the capital invested is tied up, and the only way out is not through selling the places, but only through selling the property together with the places.

Deadlines, forms and obligations after acquisition

The acquisition process isn't over once you've been awarded the places. After acquiring the places, a short deadline begins running, within which you must submit the DRIAT; it is stated in the convocation and in the acquisition certificate. If you let it lapse, the places fall back into the pool, and your money is then not tied up in a permit, but lost. This is the most common avoidable mistake in this procedure, and it happens regularly because obtaining the necessary documents takes time between the draw and the declaration.

Anyone holding a time-limited permit renews it in the month before it expires. This requires a new certificate from the place-management authority. This renewal is not automatic, something you can miss and catch up on later — the date belongs in your calendar as soon as the declaration has been submitted.

There is also a permanent insurance obligation: anyone renting out for tourism purposes must maintain liability cover for damage to guests (Art. 50.16 Ley 8/2012). The obligation is set out in law, but the amount of the premium is determined by the market — in the calculator, it belongs among the ongoing costs of the property, not the costs of the individual rental.

For the paperwork, most owners commission a Gestoría — a Spanish administrative office that handles applications, declarations and dealings with authorities. Their fee is freely negotiable and is therefore an input field in the calculator under one-off ancillary costs, not a pre-filled value that might look like an official amount. The same applies to certificates, expert opinions and advice: only you know what you pay for these, and it belongs in the investment, because it wouldn't arise without the acquisition of the places.

Legal basis and status

The prices per place are set by the Junta Rectora of the CBAT and published in the BOIB, the Butlletí Oficial de les Illes Balears — the official gazette of the Balearics, in which regional resolutions are made legally binding public. The basis is Art. 91.4 Ley 8/2012, the Balearic tourism law: it explicitly assigns price-setting to the administering authority and requires a distinction between permanent and time-limited transfer as well as the main-residence modality. The amounts in the calculator come from the current Acord of the Junta Rectora and are maintained via the central fact register — not from this text, which would otherwise become inaccurate with the next round of price changes.

The time limitation of the permit and its renewal are set out in Art. 50.3 Ley 8/2012, the main-residence modality in Art. 50.20, the insurance obligation in Art. 50.16, the excluded claim for reimbursement in Art. 91.6. The ban on new declarations for flats under the regime of propiedad horizontal together with the exceptions for terraced and semi-detached houses is set out in the Disposición adicional segunda of Decreto ley 4/2025, as amended by Ley 4/2026, published in the BOE. The temporary place exchanges and the lottery procedure are regulated by the Disposición transitoria segunda of the same Decreto ley and the current Acord of the CBAT.

The calculator itself indicates the legal status on which amounts and deadlines are based. If you want to check the originals: the consolidated version of Ley 8/2012 can be found in the BOE, and the resolutions of the CBAT in the BOIB archive at caib.es.

Frequently Asked Questions

Related Calculators

• Tax on rental income for non-residents — the tax calculation this calculator is based on.
• Self-use tax and Modelo 210 — what the tax authorities charge for vacancy days.
• Running costs of a holiday property — the expenditure side that belongs in every calculation.

And if you're even further ahead in the process: how the value of existing places behaves when buying property is covered in our guide to the Transfer of the ETV licence; the bigger picture on returns is covered in Investing in Mallorca property.