The Balearic government has raised the threshold for wealth tax from €700,000 to €3 million per person. Owners of properties in Mallorca will benefit from this adjustment. For example, a married couple can now be exempt from wealth tax on assets of up to €6 million.
This new regulation is one of many reasons why further continuous value appreciation of properties in Mallorca is to be expected. Other reasons include strict restrictions on new builds and a limited supply for foreign buyers.
The search by foreign buyers – among whom the Germans represent the largest share at 44% – now extends across the whole island, from the high-priced Port Andratx in the southwest to more affordable locations on the east coast such as Santanyí and the up-and-coming Artà in the northeast.
One result of this expansion of demand across the entire island will be that previously rather affordable properties in the €200,000 to €500,000 range will now experience a significant increase in price and value. Therefore, if you are planning to purchase a property in Mallorca in this price range, do it now. This price segment is becoming smaller and will soon disappear altogether.
However, demand for high-end properties priced at €2 million and above will also continue to increase, driving prices steadily upwards. Due to the already high price level in this segment, this development will be somewhat more moderate.
