Mallorca is more than an island, it’s a statement of lifestyle. From the honey-stone streets of Palma's Old Town to the crystalline coves along the Serra de Tramuntana coast, it offers a rare blend of Mediterranean beauty, cultural depth, and investment potential.

For international buyers considering property on the island, understanding the difference between freehold vs leasehold (pleno dominio vs arrendamiento) is crucial. This is not just legal terminology, it’s the foundation of your ownership, your control, and your long-term security.

Whether your vision is a sea-view villa in Andratx, a contemporary penthouse in Palma, or a yacht berth in Puerto Portals, choosing the right ownership structure will shape your rights, responsibilities, and long-term strategy. This guide goes beyond definitions, it’s a strategic, legally informed, and market-savvy roadmap to making the right choice.

Understanding the Core Concepts

Freehold (Pleno dominio)

In Spain, freehold means you own the property outright, indefinitely. This includes:

• The building itself
• The land it stands on (or a proportional share in the case of communal buildings)
• All associated rights, unless restricted by law or easements

When you buy freehold in Mallorca, you receive a public deed (escritura pública) signed before a notary and registered in the Land Registry, granting perpetual rights to use, sell, rent, or bequeath the property. It is the standard form of ownership in Spain and the gold benchmark for most residential transactions.

Advantages for high-net-worth buyers:

• Permanence: No expiry date; your asset can be passed through generations
• Control: Freedom to renovate, rent, or sell (subject to planning laws)
• Financing: Banks prefer freehold as collateral, facilitating mortgage approvals

Leasehold (Arrendamiento)

Leasehold grants the right to occupy and use a property for a fixed term as defined in a contract. You do not own the land or building outright, ownership remains with the freeholder.

Lease terms in Spain can range from 5 to 99 years and may be renewable. While leasehold is rare in Mallorca’s residential market, it appears in niche contexts such as marinas, golf resorts, and certain historic conversions.

At the end of the lease term, rights revert to the freeholder unless renewed.

Key characteristics:

• Time-bound: Rights expire unless renewed
• Restrictions: Renovations or subletting often require freeholder consent
• Value depreciation: Resale value typically declines as the lease term shortens

Common Scenarios: Where Leasehold Appears in Mallorca

Freehold ownership dominates the island, especially for villas, townhouses, and apartments. However, leasehold structures do exist in certain high-value contexts:

• Marinas & Port Properties: Apartments or commercial units in luxury marinas like Puerto Portals, Port Adriano or Club de Mar may be held on leasehold arrangements tied to the port’s government concession. Yacht berths are typically sold on a leasehold basis.
• Golf Resorts & Holiday Complexes: Some resort developments sell villas or apartments on leasehold land owned by the resort operator. Buyers enjoy access to shared amenities, but must pay ground rent or service charges.
• Historic Conversions: Occasionally, land remains under institutional freehold (such as church or municipal ownership), with units sold on long leases.
• Communal Buildings: Certain older tourist properties may have leasehold-style agreements tied to land rights.

Legal Considerations and Due Diligence

Spain’s property laws are transparent, but the nuances require expert interpretation. For foreigners, the legal process is identical to that for Spanish nationals, but the stakes are higher if you are unfamiliar with the system.

For leasehold contracts, ensure the following are explicitly stated:

• Duration (start and end dates), extension and renewal terms
• Ground rent or annual fees
• Rights and restrictions (subletting, commercial use)
• Access to communal areas (pools, gardens, parking)
• Maintenance obligations and costs
• Restrictions on renovations or alterations
• Exit clauses

Legal advice is non-negotiable. A qualified local property lawyer (abogado) will:

• Verify the title deed (escritura) and lease terms
• Review the nota simple for encumbrances
• Ensure compliance with the Ley de Arrendamientos Urbanos where applicable

Why Ownership Type Matters

The choice between freehold and leasehold impacts:

• Resale Value: Freehold properties generally achieve higher resale values and attract a broader buyer pool. Leasehold properties can be harder to sell, especially with less than 30 years remaining.
• Renovation Rights: Freeholders have full control (subject to planning permissions), while leaseholders often need written approval from the freeholder or concession authority.
• Costs: Both types pay community fees under the Horizontal Property Law, but leaseholders often also pay ground rent and service charges.

Real-World Scenarios

Palma Old Town Apartment (Freehold)

• Ownership: Perpetual + share of communal areas
• Flexibility: Can sell, rent, or renovate (with community approval)
• Value: Strong appreciation potential in heritage zones

Puerto Portals Berth (Leasehold)

• Term: Expires with marina concession in 2035
• Costs: Upfront premium + annual mooring fees
• Resale: Value diminishes as expiry approaches

These examples illustrate how ownership type affects liquidity, flexibility, and long-term strategy.

Foreign Buyer Essentials

• No restrictions on foreign ownership (freehold or leasehold)
• All buyers must obtain an Número de Identificación de Extranjero (NIE)
• Property ownership does not grant residency

Post-2025 Visa Landscape:

• Non-Lucrative Visa: For retirees or those living off passive income (€28,800+/year)
• Digital Nomad Visa: For remote workers employed by non-Spanish companies (€2,160+/month)

Planning Permissions:

• Freeholders must comply with local planning laws
• Leaseholders must meet both municipal requirements and lease restrictions

Taxes and Costs:

• IBI (property tax), Basura (waste tax), community fees
• Leaseholders may also pay ground rent and service charges

Risks:

• Freehold: Hidden debts, unauthorised works
• Leasehold: Short remaining term, unclear renewal terms, escalating fees

Strategic Recommendations

For most high-net-worth buyers seeking a primary residence or long-term investment, freehold remains the preferred route. Leasehold can suit specific lifestyle assets or shorter-term horizons, but demands meticulous legal oversight.

Checklist:

• Verify ownership type in the title deed
• Review lease terms, renewal rights, and restrictions
• Calculate all annual costs and fees
• Evaluate future resale potential
• Engage a seasoned Mallorcan property lawyer

From Knowledge to Action

Choosing between freehold and leasehold is more than a legal decision — it’s about how you wish to live, invest, and secure your legacy on the island.

At Homerun Brokers Mallorca, our international clients consistently tell us the same thing: clarity builds confidence. When you understand the nuances of buying property in Mallorca and work with the right experts, the process becomes not just seamless — but deeply rewarding.

Next steps:

• Arrange a confidential strategy session with our legal partners
• Download our exclusive 2025 Buyer’s Buying Guide for Mallorca
• Schedule a personalised Property Rights Risk Assessment

When the stakes are this high, settling for generic advice is not an option. With the right team beside you, your Mallorcan property journey can be as exceptional as the home you choose.

Our Clients’ Success Stories

Success, for us, is about more than transactions — it’s about aligning lifestyle vision with legal certainty.

• Maria Fernanda toured over 80 properties before finding her dream home. “Piers understood what I wanted, knew the island perfectly, and his customer service was impeccable,” she shares.
• Erik Larsson from Sweden praised the seamless process: “Purchasing a property in Marbella with Homerun Brokers was incredibly smooth. I’m thrilled to see them expanding to Mallorca.”

We are here to help you make a safe and profitable investment in Mallorca.
Speak with our experts today — your future home awaits.