Holiday apartments, Palma. | Jaume Morey

The TSJIB has overturned Palma City Council’s ban on tourist rentals in apartment buildings in the captal and ruling in favour of an appeal by the Association of Apartments & Seasonal Rental Housing, or Habtur.

The Court found that the ban violates European directives and state legislation and is disproportionate and unnecessary.

“The absolute prohibition of vacation rental in flats does not appear as weighted with the purposes alleged by the City Council,” states the ruling. “Cort can make use of its powers, including the regulations designed to regulate a framework for the management of economic activities that affect areas of general interest."

“The public aims pursued can be obtained through less radical means, some of them already made positive. The ban is the last possible solution to harmful effects that the defendant Administration is trying to avoid and stop,” according to the Court.

“The free exercise of tourist activity must be combined with the general interests, and in this interconnection administrative decisions can be adopted that must be proportional, suitable and necessary for the community."

Habtur claimed that Palma City Council’s decision violated free competition and the freedom to provide services and that it discriminated against the owners of this type of housing.

Cort argued that the aim of the ban was to protect and guarantee civility, the environment and access to housing.

“This laudable purpose must be proportionate and necessary, that is, it must be justified that the restriction on freedom is carried out in an adjusted manner in order to obtain the intended result and that the intended purpose cannot be achieved through less restrictive mechanisms,” according to the judgement.

The Court rejected the Association’s other arguments, including the fact that Palma City Council had no powers to take this measure.


"The Municipal Corporation has complied with the jurisdictional and procedural rules contained in a legal regulation subsequent to the laws cited as violated which is coordinated with them, also constituting a special and specific regulation of the management of administrative control,” said the TSJIB.

It also ruled that there were no errors in the processing of the rule and pointed out that the data submitted by Cort to oppose the document did not in any way constitute evidence of a falsification of signatures or non-compliance with the rules.

The judges agreed to impose limitations on the tourist marketing of homes in saturated areas, such as Playa de Palma, where rentals will be limited to a maximum of 60 days a year.

"It is incontrovertible that these limitations are proportionate and reasonable to the special urban planning of these sectors, together with environmental and public health reasons," according to the judgement.

Palma Housing

A plan to build 1,300 flats for young people has been put on hold by the Government.

To further complicate the legal situation, a moratorium which was approved by Parliament, will be in force until December 31, which prevents new tourist rental authorisations in Palma. The moratorium was intended to prevent the rental of single-family homes, but it is not known to what extent apartment rentals may also be affected in light of the TSJIB ruling.