25 · Building & Renovating in Mallorca — What Buyers Need to Know About Costs, Trades and the Law
*If you renovate in Mallorca, a handful of early decisions determine whether you spend or save tens of thousands of euros: the IVA lever (10 % instead of 21 %), realistically calculated construction costs, the right contracts, an enforceable warranty — and the discipline never to pay without an invoice.*
What this means for you as a buyer: Fee and price figures in this chapter are market benchmarks 🟡. Since the liberalisation of 2009/2010, the professional chambers may no longer set binding tariffs — so negotiate freely and compare. The legal points (IVA, LOE, licences), by contrast, are backed by primary sources ✅ and are not negotiable.
Which Reform You're Planning — and When a Licence Is Required#
In practice, people distinguish between a reforma integral (full renovation) and a reforma parcial (partial renovation) — but that's mainly a question of scope and price. For the permit, the scope is irrelevant. What matters is solely whether you touch the structure, the façade or common elements, or the use of the property. As soon as you do, you have an obra mayor (project plus licence); otherwise an obra menor via comunicación previa (prior notification) or declaración responsable (responsible declaration) will suffice. (→ Ch. 10)
What to watch for when you receive a quote:
presupuesto(itemised quote) — a detailed offer withmediciones(quantity take-offs) and unit prices. Get at least 3 of these. A flat fixed price "a tanto alzado" with no line-item list sounds convenient, but it's a gateway to extras andsobrecoste(cost overruns).contrato de obra(works contract) — this is where the budget, payment schedule and deadlines belong, the latter with a penalty forretraso(delay), as well as a clear stipulation of who obtains the licences. Thehoja de encargois separate from this: it's the design contract with the architect or aparejador.
The IVA Lever: 10 % Instead of 21 % ✅#
This is where the greatest savings potential lies for buyers. The reduced rate of 10 % (instead of the standard 21 %) applies to obras de renovación y reparación (renovation and repair works) under Art. 91.Uno.2.10º LIVA — but only if all three conditions are met together:
1. The client is a private individual using the property as their own home or a comunidad de propietarios (owners' association) — so it does not apply to rentals, commercial use or property developers. 2. The home has been completed for at least 2 years. 3. Material share: The material supplied by the tradesperson is ≤ 40 % of the taxable base. If this threshold is exceeded, 21 % becomes payable on the entire transaction.
How to use this in practice: Buy the expensive materials — tiles, sanitaryware, flooring — yourself, so that only the labour remains and you lock in the 10 %. Be careful with insurance claims: if the insurer carries out the repair directly and pays for it itself, that does not qualify for the reduced rate.
A second, independent route to the 10 % is rehabilitación (structural rehabilitation): it requires that more than 50 % of the costs relate to structure, building envelope or energy efficiency and that the total costs exceed 25 % of the value (excluding land value).
What You Should Budget Per Square Metre (Mallorca 2025, benchmarks 🟡)#
| Work | €/m² |
|---|---|
| Reforma integral, standard | ~650–1.200 |
| Reforma integral, premium/design | up to ~2.000 |
| New-build chalet, basic | from ~1.300 |
| New build, mid-range | ~1.700–2.000 |
| New build, luxury | ~2.200–2.500+ |
What pushes costs up is rarely the obvious thing: premium materials of course, but above all hillside locations and old-town logistics, plus the requirements of the individual municipality. So always obtain several local presupuestos and realistically build in a contingency reserve of ~10–15 % — on Mallorca, that range is the rule rather than the exception.
Who Works on Site — Tradespeople and Designers#
gremiorefers to the individual trade:albañil(bricklayer),fontanero(plumber),electricista(electrician),pintor(painter) and so on. For a full renovation, reckon on around 7 trades.autónomo(sole trader) vs.empresa(company): A company takes on the coordination and offers more in the way of liability cover; the individual autónomo is often cheaper. Which route fits depends on how much you want to manage yourself and how large the project is.- 🟡
sin factura— i.e. cash-in-hand, off the books: Here you only appear to save. You lose the warranty, the IVA advantage and, above all, any proof in the event of a dispute. So pay without exception by bank transfer against an invoice. Also ask to see the tradesperson's validseguro RC(public liability insurance) — owners' associations often require it before work even begins. - The architect (
arquitecto) and theaparejador/arquitecto técnico(quantity surveyor / technical architect) handle the project, thedirección de obra(site management) and the CFO. The fee is around ~3–5 % of the PEM (material execution budget) 🟡. Permit-requiring projects need thevisado(professional sign-off) of the COAIB. certificado final de obra(CFO — final works certificate): For an obra mayor it is a prerequisite for thecédula(occupancy licence) and first occupation (→ Ch. 09/10) — no CFO, no clearance to use the property.
How Long Your Tradesperson Remains Liable (LOE Art. 17) ✅#
The decisive moment is the recepción de obra, the handover/acceptance of the works. From that point, tiered periods apply: 1 year for execution and finishes, 3 years for habitability, 10 years for the structure. These are warranty periods — the defect must arise within this time. Separate from this is the limitation period for bringing a claim: the claim lapses 2 years from when the damage appears (Art. 18 LOE). For new builds, the seguro decenal (ten-year structural insurance) also comes into play (→ Ch. 28).
The Expensive Traps — and Which Incentives You Can Use#
- Reform without a licence is illegal. The fine is 50–100 % of the construction value on developable land and up to 250–300 % in protected areas ✅. The key point to understand: the penalty legalises nothing. Two separate procedures run in parallel —
sanción(the fine) andrestablecimiento(restoration to the original state) — and the outcome can be demolition (→ Ch. 09). This is exactly why you check permits before building, not afterwards. - Old town and BIC: Here an additional
informe de patrimonio(heritage report) applies, and the façade, windows and materials are strictly regulated (Ley 12/1998 Patrimonio Histórico IB). It's best to clarify the protected status before you buy — it can sink entire conversion plans. - Energy-efficiency renovation — incentives 🟡: Funds were available through Next Generation / PRTR, but were largely exhausted by 2025 (for 2026 it's worth checking again). On top of that there is an IRPF deduction of 20–60 %, an IBI bonus (in Palma up to 50 % over 6 years) and an ICIO reduction of up to 95 %. The order of steps is decisive here: energy certificate before → the works → energy certificate after → only then the application.
❓ FAQ#
How do I secure 10 % instead of 21 % IVA on a reform? The home must be ≥ 2 years old, the client must be a private owner-occupier or a comunidad, and the tradesperson's material share must be ≤ 40 % of the invoice. Otherwise 21 % becomes payable.
How long is the tradesperson liable? 1, 3 and 10 years respectively — for execution, habitability and structure — counted from the handover of the works. The claim lapses after 2 years.
What are the consequences of a reform without a permit? A fine of 50–100 % of the construction value (more in protected areas), plus either legalisation or demolition.
Sources (selection)#
- Agencia Tributaria (IVA obras, Art. 91 LIVA) · Ley 38/1999 (LOE) Art. 17/18 · Ley 12/1998 (Patrimonio IB) · CAIB/MIVAU (PRTR) · COAIB (visado) · infraccionesurbanisticasmallorca.es