The Balearic Islands’ tax reform has saved taxpayers €1.44 billion since it was introduced three years ago. Most of this amount comes from inheritance tax relief, although reductions for first-home purchases and regional income tax deductions have also benefited thousands of residents.
Antoni Costa, First Deputy President and Minister for Economy, Finance and Innovation. Photo: CAIB.
The Balearic Islands’ tax reform was one of the first measures approved by the Government headed by Marga Prohens of the People’s Party at the start of the parliamentary term. “This package of measures has been introduced without compromising the strengthening of essential public services. On the contrary, during this parliamentary term the Government has increased resources to unprecedented levels for healthcare, education, social services, housing and sustainability, while also beginning a process of restoring the public finances,” says First Deputy President and Minister for Economy, Finance and Innovation, Antoni Costa.
Balearic Islands tax reform removes more than €1.09 billion in inheritance tax
The greatest financial impact of the reform relates to inheritance tax. Since the relief came into force, 38,925 families have benefited from the measure, saving a total of €1.09 billion.
Of this total, 34,797 taxpayers in groups I and II saved €998.9 million, while a further 4,128 taxpayers in group III saved €100.4 million thanks to the relief approved by the Government.
“As long as this Government remains in office, people will never again have to pay tax on an inheritance, a tax that penalises the effort and work of an entire lifetime,” Costa says.
More than 10,800 people benefit from first-home tax relief
Meanwhile, the measures applied to property transfer tax have enabled 10,801 people to make combined savings of €116.46 million.
Among them, 5,088 buyers aged over 36 purchased their first home at a reduced rate of 4%, while 3,543 people under 36, large families, single-parent families and households caring for people with disabilities received a 50% reduction.
In addition, 2,170 people under 30 and people with disabilities were fully exempt from the tax thanks to a 100% reduction. The Government has recently raised the maximum property value eligible for these tax benefits.
Income tax deductions reach more than 111,000 taxpayers
The reform has also strengthened regional income tax deductions in areas including housing, education, work-life balance and social services. During the latest income tax campaign, covering the 2024 tax year, 111,418 taxpayers claimed at least one of these deductions, 72.9% more than in the 2022 campaign.
The financial impact of these deductions amounted to €39.18 million, with an average saving of €352 per taxpayer.
Public debt falls as the Balearic Islands record a third consecutive surplus
The Government has also highlighted the performance of the public finances during the parliamentary term. The autonomous community’s debt has fallen by €510 million, while the debt-to-GDP ratio stood at 17.7% at the end of 2025, its lowest level since 2010.
The Balearic Islands also closed 2025 with a surplus of €53 million, equivalent to 0.1% of GDP, marking three consecutive years of positive public accounts.
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