On 11 February 2022, Decree Law 3/2022, of 11 February, on urgent measures for the sustainability and circularity of tourism in the Balearic Islands, was published in the Official Gazette of the Balearic Islands (“BOIP”).
This Decree, although it is defined as an example of sustainable tourism, has some important economic consequences to take into account: the suspension of the granting of tourist licences for a period of four years.
What is a moratorium?
A moratorium is a period or extension of time that is established between the parties involved, to carry out something, generally it can be the payment of a debt or overdue debt, the payment of taxes.
However, in the present case we refer to the word moratorium as the right granted by the Administration to suspend the granting of licences to citizens.
What has been suspended is the granting of licences for the creation of hotel accommodation and rental for tourist purposes.
Specifically, it was decided in a decisive way what the rate of growth of the Balearic Islands should be, which, according to the published regulation, means a decrease in hotel and tourist flat space compared to previous years.
Won’t I have a tourist licence in 4 years?
You will be able to apply for it, of course, but its concession will be suspended for four years until the Tourism Intervention Plan (PIAT) is modified.
The PIAT must be the due reflection of all the intentions that this Decree entails, i.e. each Island Council must determine the maximum ceiling of growth (i.e. the maximum number of hotel beds and tourist rentals) which must never exceed the number of beds that each Island Council has.
Does this mean possible losses for the Balearic economy?
Not at all. In fact, in the article Balearic Market we explain why the Balearic market is always a good investment option: its value always increases regardless of the economic or health crises that may exist, as its demand is not located in a single State, but receives flows and inputs from any world power. MORATORIA
However, if the idea is to buy in order to make it profitable month by month, you can see that it will not be immediate, but the four-year wait does not hinder profitability in the medium and long term.
WHAT YOU SHOULD KNOW: HOW MANY PLACES EACH ISLAND COUNCIL (MALLORCA, MENORCA, IBIZA AND FORMENTERA) IS GOING TO GRANT AS A MAXIMUM.
Once it has been determined, once the PIAT of each Island Council has been established, all possible preparatory procedures must be prepared, at the point of presentation, in order to be able to apply for them, and thus continue with the investment idea.
It should also be noted that if the Island Council has not decided on the number of places within 4 years, the places that are on hold will be extinguished (which is very unlikely to happen).
Can the moratorium be extended?
It is possible as long as the Balearic Government considers it strictly necessary, in view of the existing scenario in February 2026. However, extending it for a further four years could go against the general interest of the Islands, so a moratorium of 8 years is not a viable or likely scenario.
We would like to insist that the moratorium does not imply that acquiring a property is no longer profitable, since, if sold again, there can be an average gain of 15%, as we explained in the article “The revaluation of houses rises by 15% every year”.
In conclusion, the moratorium is only a parenthesis that the Balearic Government has wanted to take in order to reorder the idea of tourism, and to be the spearhead of the so-called Sustainable Tourism, in order to become a European example.
The moratorium does not imply, in any way, a future prohibition to grant places, and we strongly recommend to prepare any previous documentation necessary so that the corresponding procedure can be started at the end of the moratorium.
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