The restriction on second homes in the Balearic Islands has acquired special legal relevance following the presentation, on September 9, 2026, of the proposal for a European Regulation on affordable housing —Affordable Housing Act, COM(2026) 599— by the European Commission.
Since its introduction, the initiative has been circulating in the Balearic Islands as a potential way to limit home purchases by non-residents. However, the legal scope of the text is different: the proposal does not establish restrictions based on nationality or residency, but rather on the intended use of the property and, in particular, whether it is considered a primary or secondary residence.
This difference is crucial in determining which acquisitions could be affected by a future measure, which buyers would fall within its scope, and what the legal conditions would be to introduce a restriction.
At Resitax we are experts in real estate law, international taxation and wealth planning and we carry out our activity from Mallorca, where we regularly advise national and international buyers, owners and investors on real estate transactions in the Balearic Islands.
Legal summary
The proposed Regulation COM(2026) 599 does not currently establish a ban on the acquisition of housing by foreigners or non-residents in the Balearic Islands. The text establishes a framework that would allow the competent authorities to adopt restrictions on residential properties not intended as primary residences in areas previously declared to be under pressure, provided that the objective, territorial, and proportionality requirements established in the proposal are met.
Any measures taken could not discriminate between citizens of the Union on the grounds of nationality and, according to the proposed text, the conditions linked to the acquisition would only apply to properties acquired after the date of application of the relevant measure.
Proposal for a European Regulation on affordable housing
Legal nature of COM(2026) 599
The European Commission presented on 9 September 2026 the proposal for a Regulation on affordable housing —Affordable Housing Act, COM(2026) 599—.
The proposal takes the form of a Regulation of the European Parliament and of the Council, with a legal basis in Article 114 TFEU.
It does not yet constitute applicable law.
It must be approved through the ordinary legislative procedure, with negotiation in the European Parliament and the Council.
As a result of that process, the final content of the Regulation may differ substantially from the currently proposed text.
The Regulation does not directly impose restrictions
The proposal does not, in itself, introduce restrictions on the acquisition of housing.
Its function is to establish the conditions under which national, regional or local authorities may adopt certain measures.
It would then be up to the competent authorities to decide whether to make use of that framework and, if so, to approve the necessary regulations.
Position of the Government and Parliament of the Balearic Islands
Position expressed by the Government
On September 11, the Government spokesperson, Mr. Antoni Costa, stated that the Executive will apply limits to the purchase of second homes if it determines that they are "efficient and effective".
In those statements he also acknowledged that a direct ban is not feasible under current law.
Position of the Parliament
In the plenary session of the Parliament on September 22, the president, Ms. Marga Prohens, conditioned any possible measure on the demonstration of its effectiveness and that it does not harm the current owners.
Currently there is no Balearic regulatory text nor a specific implementation schedule.
Weight of foreign buyers in the Balearic Islands
In 2025, 29.8% of home sales in the Balearic Islands were made by foreign buyers, compared to a national average of 13.8%.
These figures explain the particular intensity of the debate in the Balearic Islands, but they do not alter the legal framework established by the European proposal.
Restriction criterion: use of housing and not nationality
Scope defined by Article 2
One of the essential elements of COM(2026) 599 is the criterion used to delimit possible restrictions.
Article 2 of the proposal limits its scope to measures intended to restrict the acquisition or use of residential properties not intended as a primary residence.
The central legal element is therefore not the nationality of the acquirer nor, directly, their status as a resident or non-resident.
The determining criterion is the use of the property.
Primary residence and secondary residence
This distinction is especially relevant in the Balearic Islands, where a significant part of the public debate has been framed in terms of foreign or non-resident buyers.
The proposal, however, operates on a different category: housing that does not constitute a primary residence.
This implies that the configuration of any future measure must be analyzed from the perspective of residential use and not exclusively from the buyer's origin.
Prohibition of discrimination between citizens of the European Union
Article 8 of the proposal
Article 8 prohibits measures adopted that discriminate, directly or indirectly, between nationals of Member States on grounds of nationality.
In the case of legal persons, the prohibition also extends to discrimination based on the Member State of establishment.
Consequences for European buyers
Consequently, a German or French buyer acquiring a second home in Mallorca could not receive more burdensome treatment on account of their nationality than a buyer residing in Madrid or Barcelona acquiring a second home in the same area.
A restriction adopted under the Regulation would affect second homes within its scope, regardless of the nationality or residence of the purchaser.
British buyers and third-country nationals
Scope of protection under Article 8
The non-discrimination clause contained in Article 8 protects only nationals of Member States.
Citizens of the United Kingdom, the United States, or Switzerland are not covered by this provision on the same terms.
Freedom of movement of capital
However, these buyers are subject to the free movement of capital under Article 63 TFEU, which also extends to movements with third countries.
This freedom allows for restrictions justified by compelling reasons of general interest, although with a different legal margin.
State proposal concerning non-EU buyers
Added to this scenario is the state proposal to tax 100% the acquisition of housing by non-resident non-EU citizens, announced in January 2025, which has not been debated or voted on in Congress.
Resitax analyzed this project in a previous article on the tax on non-European buyers.
Requirements to declare a stressed zone
A general and automatic restriction on the entire archipelago does not fit within the terms of the proposal.
Article 6 requires that the competent authority prove the existence of a situation of tension through objective indicators.
Article 7 also requires that the affected area be clearly delimited and that the measure not exceed what is necessary.
Objective requirements outlined in the proposal
| Requirement | Content |
|---|---|
| Price/rent ratio | The average price of housing is equivalent, at a minimum, to eight years of disposable income per capita. |
| Evolution | The ratio has increased over the last ten years of available data. It is not required when the ratio reaches ten years. |
| Projection | It is expected that the tension will not subside in the following three years. |
| Territorial delimitation | Neighborhood, municipality, metropolitan area or part of them, without exceeding what is necessary. |
| Proportionality | No less restrictive measure is sufficient. |
| Duration | Maximum of five years, renewable if the requirements remain. |
Price/rent ratio
The proposal requires that the average price of housing be equivalent, at a minimum, to eight years of disposable income per capita.
This indicator constitutes one of the objective elements necessary to prove the existence of tension.
Evolution over the last ten years
The ratio must have increased during the last ten years of available data.
The proposal establishes an exception to this requirement when the ratio reaches ten years.
Projection for the next three years
It should also be expected that the tense situation will not subside during the following three years.
The declaration cannot, therefore, be based solely on a circumstantial situation.
Territorial delimitation and proportionality
The area may correspond to a neighborhood, municipality, metropolitan area, or part of them.
The delimitation cannot exceed what is necessary and it must be justified that no less restrictive measure is sufficient.
Maximum duration of restrictions
The maximum duration is five years, extendable when the required conditions continue to be met.
The proposal thus defines the restrictions as measures that are temporarily limited and subject to the persistence of the circumstances that justified their adoption.
Restrictions relating to short-term rentals
Dwellings that do not constitute a primary residence
Regarding short-term rentals, the proposal allows restrictions on dwellings that do not constitute the host's main residence.
This requires demonstrating a significant adverse effect on the affordability or availability of housing for at least three years.
Regulation (EU) 2024/1028
The proposal also requires the application of the registration provided for in Regulation (EU) 2024/1028.
Failure to comply may result in the suspension or withdrawal of the corresponding registration number.
Current owners: non-retroactivity and transitional regime
Article 10.1.f)
Article 10.1.f) states that the conditions linked to the acquisition will only apply to properties acquired after the date of application of the measure.
Article 10.2
Article 10.2 requires an appropriate transitional regime when the measure affects pre-existing legitimate situations.
Effects for current owners
According to the proposed text, the current owner of a second home in the Balearic Islands would not lose ownership nor have the use of their property restricted as a result of this Regulation.
The potential risk lies in a different area.
If the area where the property is located were subsequently declared stressed, a reduction in the number of potential buyers could affect liquidity and resale value.
Relevance to international buyers and investors
Schedule prior to the application of a restriction
Before a restriction can be applied in the Balearic Islands, several phases must be completed.
First, the European negotiations must be completed and the Regulation definitively approved.
Subsequently, the corresponding voltage indicators must be accredited.
The delimitation of the affected areas will also be necessary.
Finally, a specific regulation must be approved by the competent authority.
This rule may also be subject to challenge.
Acquisitions formalized before a future measure
According to the currently proposed text, an acquisition formalized before the application date of the corresponding measure would be excluded from the new conditions linked to the acquisition.
The date of formalization of an operation therefore becomes relevant within the regime provided for in the proposal.
Acquisition of housing through a company
The use of a company does not eliminate the restriction
The acquisition of the property through a company does not in itself exclude the possible application of a future measure.
The criterion of the proposal is the use of the property, not exclusively the legal identity of the person listed as the owner.
Treatment of legal entities
The proposal also contemplates that the measures can be calibrated more intensely when the owner is a legal entity.
The corporate structure must be analyzed together with the intended use of the property and with the tax, real estate and asset implications of the acquisition.
Relocation to Mallorca
Consideration as primary residence
When the acquisition is part of an actual project to move to Mallorca, the consideration of the property as the main residence takes on additional relevance.
Its importance may extend beyond the strictly fiscal sphere and reach the eventual application of future restrictions on second homes.
Coordination with the tax residence
It is important to document the intended use of the property from the time of acquisition and coordinate it with the tax residence planning.
Where applicable, the special regime for inpatriates of article 93 LIRPF.
Aspects to consider before making a purchase in the Balearic Islands
The evolution of COM(2026) 599 introduces a new variable within the legal analysis of certain real estate operations in the Balearic Islands.
Regulatory processing status
The processing status of the proposed Regulation must be verified, as well as the existence of any regional or municipal regulations in preparation that may affect the area of the property.
Intended use of the dwelling
It must be determined whether the property will be used as a primary residence or a secondary residence and this circumstance must be properly documented.
Effect of a possible declaration of a stressed zone
The impact that a potential declaration of a stressed zone could have on the future transmission capacity and liquidity of the property must be assessed.
Acquisition structure
When the purchase is to be made through a company, the structure must be analyzed from real estate, tax and asset perspectives.
Tourist use
When tourist use is planned, the status of the ETV license and the registration required by Regulation (EU) 2024/1028.
Frequently asked questions about the restriction on second homes in the Balearic Islands
Does COM(2026) 599 establish a ban on the purchase of housing by foreigners in the Balearic Islands?
No.
The proposal establishes a framework for the possible adoption of measures on residential properties not intended as primary residences in areas where there is a duly accredited situation of tension.
It does not establish a general prohibition on the acquisition of housing by foreign buyers.
Does the proposal allow for restricting purchases by non-residents?
The proposal's criteria are not directly based on the buyer's residence.
The determining factor is whether the property is used as a primary or secondary residence.
Can the entire territory of the Balearic Islands be declared a tense zone?
The proposal requires that the tense situation be proven through objective indicators and that the affected area be clearly delimited.
Article 6 establishes the accreditation criteria and Article 7 requires that the delimitation not exceed what is necessary.
What price-income ratio does COM(2026) 599 establish?
The average price of housing must be equivalent, at a minimum, to eight years of disposable income per capita.
The ratio must have increased during the last ten years of available data, except when the ratio itself reaches ten years.
What projection period does the proposal require?
It should be expected that the tense situation will not subside in the following three years.
What is the maximum duration of a restriction?
The maximum duration is five years, renewable if the requirements remain.
Is there discrimination between buyers from different Member States?
Article 8 prohibits direct or indirect discrimination between nationals of Member States on grounds of nationality.
Which framework applies to British, American, or Swiss citizens?
These buyers are not covered by Article 8 on the same terms as citizens of Member States.
However, the freedom of movement of capital under Article 63 TFEU, which also extends to movements with third countries.
Would a future restriction affect current owners?
Article 10.1.f) establishes that the conditions linked to the acquisition will apply only to properties acquired after the date of application of the corresponding measure.
Article 10.2 also requires an appropriate transitional regime for pre-existing legitimate situations.
Does purchasing through a company prevent a future restriction?
No.
The proposal addresses the use of the property and also considers the situation of legal entities.
Is COM(2026) 599 currently in effect?
No.
This is a proposed regulation that still needs to complete the ordinary legislative procedure and whose final text may differ from the version currently presented.
Resitax, specialists in real estate law and international taxation in Mallorca
Our work with national and international buyers, owners and investors allows us to analyze a real estate acquisition from a joint perspective: legal status of the property, purchase structure, tax residence, taxation of the operation, estate planning and evolution of the Balearic and European regulatory framework.
We are following the processing of COM(2026) 599 and the evolution of possible measures that may be adopted in the Balearic Islands, so that the operations can be analyzed in accordance with the legal framework existing at the time of their formalization.
In international acquisitions, this analysis is especially relevant when a real estate purchase in Mallorca, a change of residence, corporate structures or tax and asset planning converge between different jurisdictions.
Resitax — Real estate law, international taxation and estate planning in Mallorca.
This article is for informational purposes only and does not constitute legal or tax advice. The analysis refers to the content of proposal COM(2026) 599 and should be interpreted in accordance with its stage of processing at the time of publication.