The Spanish island of Mallorca has always been appealing to foreign buyers and now even more so as law firms and estate agents are selling it as an “inheritance paradise”.
Mallorca, the largest of Spain’s Balearic Islands, has long been popular with foreign property buyers for to its natural beauty, great climate, well-established tourist scene and good connections with the rest of Europe.
Recently, however, there may be one more reason that foreigners are choosing to buy in Mallorca. According to Spanish newspaper El Diario, estate agencies and consultancy firms are selling the island as an “inheritance paradise”, attracting buyers due to its favourable inheritance tax laws.
Basically, law firms have been taking advantage of the “inheritance pact” – an old part of Balearic civil law, which dates back to the Middle Ages.
During this time, Jaume I and the Crown of Aragón wanted to regulate the transfer of family assets and prevent inheritance disputes. To do this, they formalised agreements which allowed for the distribution of assets during one’s lifetime to ensure the stability of the family lineage.
Today, firms have taken the idea of family inheritance and the traditional transfer of Majorcan assets and turned it into a device for tax “optimisation” and “cross-border estate planning”, according to one of these law firms interviewed by El Diario.
The concept of inheritance here is designed to regulate the family division of assets and preserve patrimonial continuity. Today, it still allows someone to transfer their property earlier, while they are still alive, provided the heir waives their future statutory share.
According to these law firms, in many cases, this gives rise to more favourable tax rates than that of traditional gifts, as well as more robust legal protections, which means it’s more difficult to reverse or challenge once the transfer has been formalised.
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While you can also do this in some other places in Spain, lawyers are promoting the fact that there are several advantages to doing this in Mallorca because of its medieval laws, as well as its modern ones.
For example, in 2023, the president of the region Marga Prohens scrapped inheritance and gift tax, meaning there is now a 100 percent tax exemption for inheritances received by immediate family members, which includes spouses, civil partners, children, grandchildren and parents.
Increasingly, there are more firms now specialising in tax planning and property transfer on the island, with many of them aimed at foreigners, particularly those from Germany, the UK, Switzerland and Austria.
El Diario states that these firms are particularly targeting these foreigners with slogans and advertisements such as “Tax and wealth planning for German families”, “maximum control over your inheritance” and “reduce the tax burden legally and efficiently”.
It says that one of these firms has even called Mallorca a “tax haven” for preserving, transferring, and protecting real estate assets across generations, establishing itself as “a strategic centre for wealth planning”.
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The latest report from the General Council of Notaries reveals that Germans bought the second highest number of properties purchased by non-residents in Spain during the second half of 2025 (11.9 percent), and that Mallorca was the most popular place.
One of the biggest problems, however, is that Balearic Islands, like most of Spain right now, is going through a big property crisis, where many locals can’t afford a home.
Prices have skyrocketed in recent years, both to buy and rent, and the Balearics are now one of the most expensive places to purchase property in the whole country.
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Affluent foreigners are being blamed for property speculation and driving up prices. Residents of the islands held several protests in 2025 to protest overtourism and the housing crisis that goes hand in hand with it.
As a result, the islands have been debating whether or not to put limits on foreign property buyers, particularly non-residents.
Back in April of this year, however, the proposal was rejected as both representatives from the PP and Vox voted against it.
