ULI & LISAMallorca Property Glossary All chapters uli-lisa.com →
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★ Overview1 · From Offer to Deed — The Buying Process & Contracts on Mallorca2 · Notary, Land Registry & Cadastre — the three registers your purchase rests on3 · Money Transfers, Banking & Legal Due Diligence When Buying on Mallorca4 · What the Tax Office Takes When You Buy5 · The Annual Running Costs of a Mallorca Property6 · What to Expect When You Resell — Taxes on Disposal7 · Wealth Tax & Solidarity Tax on Mallorca8 · Inheritance & Gifting on Mallorca: the Balearic Foral Law9 · Building Legality, the cédula & Retroactive Legalisation10 · Building on Mallorca: Land, Permits & New-Build Protection11 · ETV — Tourist Rental on Mallorca12 · Where People Buy on Mallorca — Thinking Municipality by Municipality13 · Tenanted Properties, Tenancy Law & the Okupas Risk14 · Your Passport Shapes the Deal: Military Permit, Visas & the Tax Chain15 · Financing & Mortgages in Mallorca16 · Estate Agents & Property Values When Buying17 · Property Types & Forms of Ownership — what the listing and the land register really tell you18 · Buying Through a Company or in Your Own Name? Legal Structures Explained19 · From Purchase to Centre of Life: NIE/TIE, Residency & Health Cover20 · Mobility & Authorities: Car, ITV, Driving Licence, Appointments21 · Buyer Pitfalls on Mallorca — and How to Avoid Them22 · The Authorities Map & Spanish Abbreviations at a Glance23 · Register of Court Rulings: the case law behind the chapters24 · Where Our Information Comes From — and How Reliable It Is25 · Building & Renovating in Mallorca — What Buyers Need to Know About Costs, Trades and the Law26 · Utilities on Mallorca: Electricity, Water, Gas & Solar27 · Agroturismo, Turismo Rural & Tourist Accommodation in the Countryside28 · Insurance Cover for Your Mallorca Property29 · What the Listing Really Says — Property-Ad & Viewing Vocabulary (ES/CAT → EN)30 · Living Here, Not Just Buying Here: Children, Pets and the Rhythm of Island Life31 · Selling Smart: What the ganancia patrimonial (Capital Gains Tax) Really Costs You32 · Boat Moorings on Mallorca (Amarre): What You Actually Buy — and What You Don't33 · Releasing Equity From Your Mallorca Home in Later Life34 · Separation & Divorce — Who Keeps the Mallorca Property35 · The Owners' Association in Mallorca: A Practical Guide to the Comunidad de Propietarios36 · The ULI & LISA Roadmap: From Search Profile to Handover of the Keys
Glossary › Chapter 33

33 · Releasing Equity From Your Mallorca Home in Later Life

*How older owners (from around 65) can unlock capital from their Mallorca property without necessarily having to give up living in it — via the reverse mortgage, the sale of the bare ownership, or a life-annuity solution. Explained from the buyer's perspective: what sits behind each model, and where the traps lie.*

Legend: ✅ confirmed · 🟡 provider-/case-dependent · 🔴 unverified. Not tax advice. Cross-references: 17 (usufruct) · 31 (capital gains tax).

Hipoteca inversa (reverse mortgage) ✅#

At its core this is a mortgage loan in which your own property serves as the security — with the decisive difference that nothing is sold: the owner stays the owner, carries on living there unchanged, and in return receives money paid out — as a monthly annuity, a lump sum, or a mix of both. The loan only falls due on death: at that point the heirs take over (typically with a window of around ~12 months) and either redeem it or sell. Important for the family: the recourse is limited to the value of the estate — the rest of the inheritance stays protected.

  • Legal basis: Ley 41/2007 (Disp. adic. 1ª), supplemented by Ley 1/2013; before signing, an

independent mandatory advisory session is required. 🔴 A separate "RD 1090/2025" reform could not be verified → verify before citing it in any form.

  • Eligibility: ≥ 65 years — alternatively a disability of ≥ 33 %, or severe care dependency.

The model offers the greatest leverage with the vivienda habitual (main/habitual residence).

  • Tax: the payouts count as loan proceeds, not as income, so they are IRPF-free (free of

Spanish personal income tax) ✅; there is additionally an AJD exemption (stamp duty) — even when the heirs later have the mortgage cancelled.

  • Risks: through compound interest (roughly 5–7 % 🟡) the outstanding debt grows continuously,

eating into the inheritance and further weighed down by ancillary costs.

Sale of the nuda propiedad with reserved usufruct ✅#

Here only the bare ownership (nuda propiedad) is sold, while the seller reserves the lifelong usufruct (nießbrauch/right of use and enjoyment for life). In practice this means: the seller goes on living in the house until death, and the buyer only moves up to full ownership afterwards. Payment is usually made as a lump sum — that delivers the highest liquidity and is the most common variant, but it comes at the price that the property can no longer be passed on by inheritance.

  • Price discount: the value of the usufruct follows the formula 89 − age (within a corridor of

min. 10 % to max. 70 %). Example: at 65 years of age the nuda propiedad therefore corresponds to 76 % of the property value.

  • Tax (seller): anyone who is ≥ 65 and sells their vivienda habitual has their

ganancia patrimonial (capital gain) fully exempt from IRPF (Art. 33.4.b LIRPF; confirmed by DGT V1459-25/2025) ✅. 🟡 This exemption, however, falls away if the ownership has already been split (desmembrado).

Renta vitalicia inmobiliaria & alquiler vitalicio#

  • renta vitalicia inmobiliaria (property-backed life annuity): structurally like the

nuda-propiedad sale, except that the consideration is not a lump sum but a lifelong monthly annuity — often roughly twice as high as with the reverse mortgage.

  • alquiler vitalicio / cesión de uso (lifelong tenancy / assignment of use): a purely

contractual (in personam) right to occupy or use the home "until death" — so, unlike the usufruct, not an in rem right; here the owner may under certain circumstances even remain full owner.

Over-65 reinvestment into a life annuity ✅#

If someone aged > 65 sells an asset and puts the proceeds within 6 months into a renta vitalicia, the ganancia can be exempted from IRPF — capped at 240,000 € (with only partial reinvestment, exempt pro rata accordingly). This is particularly interesting for second homes; for the vivienda habitual from age 65 the full exemption already applies in any case.

Providers (Spain, 2025/2026) ✅#

Active in the market are Santander/MAPFRE (nationwide), Caser (among others via Vittalias), EBN Banco (Inversa Prime), Óptima Mayores (together with BNI Europe), Caja de Ingenieros and Catalana Occidente; on the intermediary side, the likes of Renta Mayores and Grupo Retiro. 🔴 A provider "Almavida" could not be confirmed (probably a mix-up).

What this means for international Mallorca owners 🟡#

  • In principle these instruments are open to foreigners as well — the providers operate nationwide.
  • The tax sticking point: all of the over-65 / vivienda habitual exemptions hinge on a **main

residence in Spain. For anyone who holds the property — as many international owners do — as a holiday or second home, the exemption generally does not apply. In that case it is settled as with a normal sale**: IRNR (Spanish non-resident income tax, 19 %/24 %) plus 3 % retención (withholding) plus Plusvalía (→ 06 · 31).

  • Our assessment: especially with holiday properties, the reverse mortgage is often the more

obvious model — ownership is preserved, and the payout is tax-free. The nuda-propiedad sale fits less often. In every case the rule holds: residency status and the double-taxation treaty (DBA) belong in individual advice beforehand; there is no way around a case-by-case review here.

What you need to watch for#

  • As a buyer of the nuda propiedad: you carry the longevity risk — full ownership only passes to

you on the seller's death, with no use and no letting until then, and you need a long investment horizon. ✅

  • As a seller: check the provider's standing (there are ASUFIN complaints regarding reverse

mortgages), weigh up the loss of the inheritance, and keep interest, ancillary costs and possible family conflicts in view.

❓ FAQ#

With a reverse mortgage, do I keep my house? Yes — you remain the owner. The debt only falls due after death, and the payouts are IRPF-free.

Can the property still be passed on at all? Only with the reverse mortgage — the heirs redeem or sell. With nuda propiedad or renta vitalicia, by contrast, ownership passes to the buyer.

I'm a non-resident with a holiday flat — do I stay tax-free on a nuda-propiedad sale? Usually not: without a Spanish main residence the over-65 exemption does not apply, and IRNR + 3 % + Plusvalía fall due.

Sources (selection)#

  • Ley 41/2007 (BOE-A-2007-21086) · Banco de España (Guía hipoteca inversa) · Art. 33.4.b LIRPF + DGT

V1459-25 · Agencia Tributaria (Reinversión renta vitalicia, mayores 65) · Óptima Mayores (market data)

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