According to Hans Lenz of Engel & Völkers, the president of the ABINI association of national and international real estate companies in the Balearics, there is a growing trend among German citizens to make Mallorca their main residence.
Among reasons for this trend, Lenz points to teleworking, establishing business headquarters and good air connections with Germany. He believes that this will have a positive impact on Mallorca's economy. As many of the businesses are related to new technologies, these will help with economic diversification. And given new tax rules, "we will see more investment, quality job creation and innovation beyond tourism and construction".
Lawyer Alejandro del Campo of the DMS law firm says that changes to the wealth tax by the Prohens government in the Balearics will contribute to increasing the number of Germans who establish their tax residence in Mallorca.
Del Campo was an important figure in getting rid of "disproportionate fines" imposed on residents obliged to declare assets abroad if these were over 50,000 euros. A 2012 law introduced this obligation. "Nationality didn't matter. If you didn't present the declaration, there were sanctions: fixed fines of 5,000 euros per item."
As penalties have been reduced from thousands to hundreds of euros, this - he adds - has encouraged individuals with high purchasing power to establish their residence in Mallorca.
In 2012, 36,758 Germans were registered as residents of the Balearics (overwhelmingly in Mallorca). By 2014 there were 23,666. The decrease continued until 2019, when there was a slight increase from 18,895 in 2018 to 18,922. The pandemic then intervened, but the number has since risen - 18,979 from 18,222 in 2021.