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in the Balearic Islands

On 28 May, the official gazette of the Balearic Islands published the Decree Law 3/2024 of 24 May on ¨urgent measures for administrative simplification and rationalization¨. This Decree aims to improve efficiency and streamline procedures, but it goes beyond what is stated in its title and introduces important new features, especially in urban planning. The Decree Law is attracting a lot of interest because it regulates a new procedure to legalize illegal works on rural land.

Legalization of constructions on rural land

One of the most important innovations contained in the Decree Law is the extraordinary procedure for the legalization of constructions that are totally or partly illegal on rural land in the Balearic Islands. This procedure is ‘extraordinary’ because the last time that a similar measure was introduced was back in 2014, and because it is valid for only three years from the date on which each of the Councils agrees to transfer the Decree-Law to the territorial scope of each island.

This procedure can be used for those totally or partially illegal constructions on which the administration can no longer act, i.e. order demolition and impose penalties due to the time that has elapsed. Illicit constructions are those built after 1956 without a license, irrespective of whether they are registered at the Land Registry. The name given to constructions falling into this legal category of being totally or partly illegal is ‘unregulated’ or ‘fuera de ordenación’, and no works of any kind may be performed in them, which may affect the part the illegal part.

Any dwellings legalized via this new procedure may not be used for tourist rentals. This rule may be amended in the coming months once the Decree Law is processed in the Balearic Parliament.

Advantages of legalizing illegal construction

The possibility of carrying out all types of maintenance or refurbishment works.
Increase in market value.
Increase in the value of the appraisal required for mortgage financing operations.

Requirements for legalizing a construction

Before legalizing a construction, it is advisable to carry out a prior technical and legal study.

As a general rule, in order to benefit from the legalization procedure, it is necessary to prove that the illegal works were completed over eight years ago. In the case of buildings located on protected land (areas identified with the abbreviations ANEI, ARIP, or ANNP), the works must have been completed before 10 March 1991.

Legalization can apply to dwellings, warehouses, porches, swimming pools, amongst other constructions, and in some cases, changes of use are also covered.

Building works located on publicly-owned land or that are subject to highways easements, or other easements imposed by the legislation governing coastlines, or buildings the use of which requires the acquisition of licenses (hotels, hostels, etc.) or rights (wells, mining operations), are not eligible for this procedure. Likewise, it is not possible to legalize buildings that are earmarked for expropriation or that require special authorization known as ‘general interest’ where this has not been obtained.

Estimated cost of legalization

Payment of a fee: Equivalent to 10% of the construction value of the works being legalized (this percentage increases to 12.5% after the first year and to 15% during the final year).
Construction fees and taxes: Ranging between 4% and 5% approximately depending on the municipal district.
Registration in the Land Registry: 1.5% for stamp duty plus any fees payable to the notary public and the Registry.
Technical legalization project: Although the fees are free, they tend to range between 5% and 10% of the construction cost (the larger the surface area to be legalized, the lower the percentage).
Completion Certificate: A completion certificate signed not only by the architect but also by a technical architect is likely to be required.
Measures to reduce light pollution and increase energy or water efficiency. The cost or fees involved cannot be reliably estimated because they will depend on the requirements imposed by the municipal authorities. The Decree Law does not specify what impact these measures should have.

Restrictions and opportunities

In a nutshell, not all illegal constructions are eligible for legalization, and in some cases, partial demolition will be required. However, this Decree Law represents an opportunity that should be taken advantage of.

Likewise, it would be advisable to file the pertinent projects as soon as possible, given that the time limit is only three years as from when the insular authorities approve the implementation of the legalization procedure for each island. The Majorca Authority has already done so on 20 June 2024, and as such it is now possible to start filing legalization projects.

Professional recommendation

Given that legalization is both a technical and a legal matter, the procedure should be supervised by a lawyer with experience and knowledge of regional, insular and local town planning legislation. Lionsgate Capital, the leading mortgage experts in the Balearics and mainland Spain, is a trusted partner of our law firm, De La Mata Abogados, guaranteeing a comprehensive and specialized service to optimize the investment and ensure compliance with the regulations. For further details on this new legislation and personalised advice, please do not hesitate to contact us.

Article by Alejandro Guillén Valls

Lawyer at De La Mata Abogados

De La Mata Abogados is a Palma-based law firm specialised in real estate law and oriented towards international clients. Its advice includes everything related to the acquisition, development, construction and sale of real estate.