Balearic Islands Tax Deductions Guide 2025: Rent, Studies, and Insularity

The Balearic Islands present a set of regional deductions for the 2025 Income Tax season designed to alleviate the high cost of housing and the particularities of insularity. If you reside in Mallorca, Menorca, Ibiza, or Formentera, these deductions can make a significant difference in your tax return result.

Housing and Rent: Important News

The Balearic Islands have increased support for tenants and introduced measures for uncommon housing situations:

1. Main Residence Rental

Percentages and limits have been improved for 2025:

• ✅ General Deduction: 10% of the amounts paid.
• ✅ Increased Deduction: Up to 30% for those under 35, large families, single-parent families, or people with disabilities.
• ✅ Income Limit: Subject to specific taxable base levels (check based on family situation).

2. Compensation for Variable Mortgages

The Balearic Islands maintain aid to mitigate the increase in interest on variable-rate mortgage loans for main residences.

3. Deduction for Illegally Squatted Property

A pioneering new feature that allows deducting up to 40% (maximum €500) of expenses incurred (IBI, community fees, utilities, legal fees) in properties owned by the taxpayer that have been illegally occupied.

Education and Training

Fostering study and language skills is key in the archipelago:

• ✅ Studies off-island: Deduction for descendants pursuing higher studies outside their island of residence because the educational offer does not exist there.
• ✅ Language Learning: Deduction for expenses in extracurricular activities for teaching foreign languages.
• ✅ Conciliation Expenses: For the care of children under 6 years old, facilitating the working life of parents.

Support for Professionals and Others

Concept	Deduction	Notes
Hard-to-Fill Positions	40% of tax	For healthcare and teaching professionals in certain areas
Donations	15% - 25%	Promotion of the Catalan language, cultural and scientific entities
Relocation Expenses	Variable	For moving residence between islands for work reasons

Requirements for Balearic Taxpayers

1. Effective Residency: You must reside in the islands for at least 183 days. In case of moves between islands, keep your boat or plane tickets and proof of census change.
2. Squatting Proof: For the squatted property deduction, it is essential to have the corresponding judicial complaint.
3. Taxable Base Limits: The Balearic Islands have very strict income thresholds to apply the most generous deductions (especially the 30% rental deduction).

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Frequently Asked Questions (FAQ)

Does the language deduction include online English classes?

Yes, as long as the academy issues an official invoice and the course is for a school-aged child.

What if my child studies in Madrid but I am a resident in Menorca?

You could apply the off-island study deduction if the studies pursued are not offered in Menorca in public centers.

Can I apply for the mortgage deduction if my rate is fixed?

No, this aid is designed exclusively to mitigate the rise in interest rates on variable mortgages.