Long-Term Rentals in Mallorca: The LAU, the Deposit Rule Owners Miss, and Tax
26 August 2026
Not every let in Mallorca is a tourist rental. Cross the 30-day line and you're in a completely different legal regime: Spain's residential tenancy law, the LAU, with its own tenant protections, its own deposit rules, and a Balearic-specific registration step that a surprising number of owners never complete. Here's what actually applies.
First: are you even in long-term-rental territory?
The line is duration, not intent: 30 days or less is a tourist stay under the ETV regime, over 30 days falls under the LAU instead, no tourist licence needed but a formal lease required. We cover that split, the ETV licence and the fines for getting it wrong, in full in Holiday Rentals in Mallorca: The Law, the Fines, and What's Changing. This post picks up from there, on the long-term side.
The LAU's minimum term: a tenant's statutory right
Once a letting is a residential lease under the LAU (Ley de Arrendamientos Urbanos), the tenant gets a mandatory minimum term regardless of what the contract says: typically 5 years if the landlord is an individual, or 7 years if the landlord is a company. The tenant can insist on staying for that full period; it's their statutory right, not something a landlord can shorten by contract. A landlord can still end the lease early for defined legal causes (non-payment, needing the property for a close family member, and similar), but "I'd rather not renew" isn't one of them inside that minimum window.
The deposit: capped by law, and it has to sit with IBAVI, not the landlord
The LAU caps the deposit (fianza) at one month's rent for a housing lease, two months' for a non-housing one. That part is well known. What far fewer owners realise is the Balearic-specific step on top: the deposit can't just sit in the landlord's account. It has to be formally deposited with IBAVI (Institut Balear de l'Habitatge), using Modelo F-1, along with proof of payment and a copy of the signed contract, within 30 working days of signing.
Skipping this isn't a minor paperwork gap. It draws a fine of €60 to €3,000. It's also the single most commonly missed step we see referenced for long-term lets here, worth building into the signing process as a fixed task, not an afterthought, since the 30-working-day clock starts the moment the contract is signed.
Tax on the rental income: resident vs non-resident, EU vs non-EU
A tax-resident landlord (broadly, 183+ days a year in Spain, though that's not the only way to become one, see Spanish Tax Residency for the other two tests that can catch someone who never comes close to that day count) declares rental income through their annual IRPF return alongside their other worldwide income, and can deduct the usual allowable expenses: mortgage interest, IBI, repairs, and so on.
A non-resident landlord files separately, via Modelo 210 (IRNR), and the rate depends on nationality in a way that matters a lot in practice. EU/EEA non-residents pay 19% on net income: repairs, IBI, insurance, management fees and mortgage interest are all deductible, pro-rated for the days the property was actually let. Non-EU/non-EEA non-residents (UK nationals included, post-Brexit) pay 24% on gross income, with no deductions allowed at all, a materially worse position than the EU rate, and one worth factoring into the numbers before assuming a UK-owned rental pencils out the same way an EU-owned one would.
One filing-calendar change worth knowing: since 2024, non-resident rental income moved from quarterly filings to a single annual declaration. The deadline itself is also shifting: it's been 20 January, but from the 2026 tax year (filed in 2027) it moves to a 1–20 April window, under Order HAC/623/2026.
Don't leave it empty between tenants
One more reason to keep a long-term let properly under lease rather than sitting vacant between tenants: an unoccupied property is exactly the profile squatting gangs look for, and Mallorca (the Balearics generally) has seen some of the sharpest increases in occupations anywhere in Spain. A property with an active, LAU-compliant lease and its IBAVI deposit on file is a much harder target to claim was "abandoned", which is often the legal test an usurpación claim turns on. We cover the squatting risk, the 2025 anti-okupa law reform, and real recent cases in full in our Long-Term Letting Guide, worth reading before any gap between tenancies, not after.
This isn't legal or tax advice; verify specifics with a local gestor or abogado before signing a lease or filing a return. Sources: IBAVI (Govern de les Illes Balears), rental deposits (fianzas), Agencia Tributaria, Modelo 210 filing deadlines, and BOE, Orden HAC/623/2026. For the tourist-rental side of the picture, see Holiday Rentals in Mallorca: The Law, the Fines, and What's Changing, and for the full pre-purchase checklist, our Long-Term Letting Guide.