The regional Balearic government has passed strict new laws in a bid to limit the number of holidaymakers to its islands.
According to The Local, the number of tourist beds will be capped at a combined 623,624 on both islands and those who attempt to rent out unlicensed properties could be fined up to €400,000.
The news comes after a number of street protests by locals in Mallorca, Barcelona and the Basque Country.
The laws will regulate the business of short-term holiday flat rentals through websites like Airbnb and HomeAway. Flat owners will be required to be licensed and registered, and fines can be issued to the owner and the rental company if they don't comply.
It's also believed that there will be a hotline on which neighbours can report suspected unlicensed properties.
Authorities have issued a ban on rentals in all residential buildings, not including rural or free-standing properties. Licenses are only issued to buildings that have the consent of the neighbours' associations and that meet safety standards and have separate water meters.
If Airbnb, or similar home-sharing sites, advertise unlicensed rentals, they could receive the hefty fine of up to €400,000. The company has described the rule as "confusing", adding it was penalising locals who want to participate in 'the shared economy' by occasionally renting out a spare room in their home.
According to CN Traveller, the company added: "By working together, we can help build sustainable tourism models that spread benefits to many—not keep them in the hands of a few."
The Balearic islands tourist minister, Biel Barceló, said he hoped the laws would 'bring order' to a sector that had grown out of control.
Crackdown on Airbnb rentals have also occurred in Barcelona, while a blanket ban on short-term rentals has been issued in New Orlean's French Quarter.