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Renovation Grants Mallorca: NextGenerationEU, IDAE, Aerotermia and IBI Bonus 2026

Anyone renovating in Mallorca faces a rather pleasant problem: there are more funding pots than most owners are aware of. The renovation funding in Mallorca draws simultaneously from EU funds (NextGenerationEU), national IDAE programmes, the regional tax authority ATIB, and municipal IBI discounts – and in many cases all of these can be combined. This guide shows you which programmes are actually running in 2026, which are on pause and awaiting a new tender round, what the specific amounts are, what technical requirements you need to meet, and what the application process looks like step by step. Whether you want to insulate a finca, install an aerothermal system, remove an asbestos roof, or put a photovoltaic system on your roof – here you will find the reliable facts you need for your budget planning.

Renovation Grants Mallorca 2026: Funding at a Glance

Which funding options suit your property in Mallorca?

The funding system at a glance: four levels, one goal

Renovation funding in Mallorca is not a single uniform measure but a network of four levels that operate independently of one another – yet can frequently be combined.

Level Body Instrument Nature
European EU / NextGenerationEU Direct grants via national programme Non-repayable
National IDAE (Ministerio para la Transición Ecológica) Funding programmes e.g. PREE 5000, PV programme Direct grant
Regional Govern Balear / ATIB IRPF tax deduction for energy improvements Tax refund
Municipal Ajuntament (e.g. Palma) IBI discount, ICIO discount Local tax reduction

The interplay between these levels is crucial: you can claim the same renovation work across several levels simultaneously. A practical example: anyone installing a PV system with battery storage can apply for the IRPF deduction (20–60 %), the IBI discount (up to 100 % in Palma), and the ICIO discount (50–95 %) at the same time – without one form of funding excluding another.

Please note: The specific combinability depends on the respective municipality and tax residency status. Have the funding routes checked by a solicitor or a gestor before submitting your application.

NextGenerationEU in the Balearics: What is actually funded

The EU has allocated approximately 1.4 billion euros to the Balearic Islands under NextGenerationEU. A portion of this – at least 230 million euros – is flowing into sustainable tourism and infrastructure. A dedicated funding line has been established for energy-efficient building renovation.

Particularly relevant for private property owners is the PREE 5000 programme (Programa de Rehabilitación Energética de Edificios en Municipios de Reto Demográfico), which is financed through NextGeneration funds. More than 500,000 euros are available for the Balearics under this scheme, administered through the Consell de Mallorca and other local entities.

What does PREE 5000 fund?

  • Energy renovation of existing buildings in municipalities facing demographic challenges
  • Measures to improve the building envelope (insulation, windows)
  • Replacement of heating and air-conditioning systems with more efficient alternatives
  • Applications are submitted via the relevant local entity (Consell de Mallorca)

Please be aware: The administration of NextGeneration funds in the Balearics has previously been associated with bureaucratic hurdles. The Consell de Mallorca has since established a dedicated commission to handle the process. Allow sufficient lead time.

A dedicated NextGeneration funding line with a budget of 25 million euros is aimed at the removal of asbestos (fibre cement) in connection with the installation of photovoltaic systems – equally available to private individuals, businesses, and public institutions.

IDAE Photovoltaic Programme 2026: Figures, Deadlines, Technology

The IDAE programme for photovoltaic systems in the Balearics was the most widely used direct funding instrument for private households. The key facts:

Parameter Value
Funding for PV system 600 €/kWp, max. eligible capacity 5 kWp
Subsidy for lithium-ion storage 420 €/kWh, max. 30 kWh capacity
Total budget for the 2024–2026 funding round 4 million euros
Application deadline (expired round) 26 January 2026 – 30 April 2026
Status Closed due to exhaustion of funds
New funding round Expected, likely with an expanded budget

Technical requirements for IDAE funding

  1. Monitoring requirement: Every system must have a monitoring setup that displays energy production and consumption on a daily, monthly, and annual basis — accessible via mobile devices as well.
  2. No feed-in block: Systems that technically prevent surplus electricity from being fed into the grid are excluded from funding.
  3. Proof of legality for off-grid systems: Anyone installing an off-grid system on a finca must demonstrate the lawfulness of the building — for example by means of a cédula de habitabilidad or a valid planning permission.
  4. Retrofitting storage only is excluded: Battery systems for existing legacy installations without a simultaneous new PV installation are not eligible for funding.

Please note: As the current round is exhausted, it is advisable to prepare your documents now so that you are ready to apply as soon as the new round opens. Photovoltaic installations on Mallorca are also subject to their own registration requirements.

IRPF tax deduction for energy efficiency: 20 to 60 per cent

This tax deduction is currently active and applies regardless of the status of the IDAE direct subsidy. It is based on Real Decreto-Ley 19/2021.

IRPF Tax Deduction Tiers: 20 %, 40 % and 60 % depending on the degree of energy efficiency improvement for renovations in Mallorca
Measure Deduction rate Requirement
Improvement of energy efficiency (general) 20% of the net investment Energy certificate before/after the measure
Significant improvement (min. 30% reduction in primary energy demand or Class A/B) 40 % Energy certificate before/after
Comprehensive renovation of a building to Class A/B 60 % Energy certificate before/after
Costs for energy certificates (approximate flat-rate guideline) – approx. €423 per certificate

The deduction is claimed in the income tax return for the following year. A valid energy certificate Spain before and after the renovation measure, documenting the improvement, is required.

Please note: For non-residents (without tax domicile in Spain), this IRPF deduction does not apply directly. Have it checked whether comparable provisions are applicable via the Modelo 210.

IBI bonus in Palma: up to 100 per cent property tax discount

The Impuesto sobre Bienes Inmuebles (IBI) is the Spanish property tax – and many municipalities in Mallorca grant substantial discounts on it when you install renewable energy technology or energy efficiency measures.

IBI bonus in Palma de Mallorca

The city of Palma significantly expanded its IBI bonus for energy efficiency as of 1 January 2023:

Property type Bonus rate Maximum amount Duration
Residential properties with efficiency measures (solar, renewables) 100 % 12.000 € Multi-year
Non-residential properties 50 % – 3 years (renewable)

Eligible systems in Palma: Installations that harness natural resources to regulate temperature or generate electricity – i.e. photovoltaic systems, Aerotermia systems (air-to-water heat pumps) and comparable technologies.

Please note: The IBI bonus applies in Palma – other municipalities on Mallorca have their own regulations with differing rates and durations. Check with the relevant Ajuntament or have the conditions for your municipality researched. You can find more about IBI in general in our guide IBI Tax Spain.

ICIO discount: Up to 95 per cent off the construction tax

The Impuesto sobre Construcciones, Instalaciones y Obras (ICIO) is the municipal tax on construction work, which applies when a Baugenehmigung Mallorca is granted. Many municipalities offer considerable discounts on this charge for energy-efficiency measures.

Municipality type Typical ICIO discount for PV/Aerotermia
Progressive municipalities (e.g. Palma) Up to 95 %
Mid-tier municipalities 50–75 %
Municipalities without specific regulations 0 % (no discount)

The ICIO discount must be applied for directly when submitting the building permit application and cannot be claimed retrospectively. Therefore, check before submitting your documents with the Ajuntament regarding the current by-laws.

Aerotermia on Mallorca: supporting what genuinely makes sense

Aerotermia systems (air-to-water heat pumps) are considered a particularly worthwhile investment on Mallorca: the mild climate keeps the technology highly efficient even in winter, and the electricity demand of the heat pump can be ideally combined with a photovoltaic system.

Which incentives apply to Aerotermia?

  • IBI bonus: In Palma and other municipalities that support renewable energy technology, Aerotermia counts as an eligible installation (conditions as described above).
  • ICIO discount: The installation of an Aerotermia system may also qualify as an eligible construction measure – depending on the municipal by-laws.
  • IRPF deduction: If the Aerotermia installation results in a measurable improvement to the energy performance certificate (documented by an energy certificate before/after), the 20–60% deduction applies.
  • Compatibility with PV: A combined Aerotermia + photovoltaic system can activate all three tax incentive levels simultaneously.

Practical tip: The installing air conditioning in Mallorca article describes the approval process for climate control systems – much of which also applies to Aerotermia systems.

Asbestos remediation: 25 million euros from NextGenerationEU

An often overlooked funding stream: the Balearic Regional Ministry for Business, Employment and Energy has launched a grant scheme worth 25 Millionen Euro from NextGeneration funds, specifically targeting the combination of asbestos/fibre cement disposal with the installation of photovoltaic systems.

Who can apply?

  • Private individuals
  • Businesses
  • Associations
  • Public institutions

What is funded?

  • Removal of fibre cement or asbestos roofs and surfaces
  • In connection with the installation of PV panels on the remediated roof
  • Both commercial and residential buildings

Please note: Asbestos on roofs is not generally illegal in Spain, but disposal is subject to strict environmental regulations. Proof of proper disposal is a prerequisite for funding. Only engage certified specialist contractors.

Step by step: how to apply for renovation funding in Mallorca

Step-by-Step Process for Applying for Renovation Grants in Mallorca: from the Energy Performance Certificate before the works to the IRPF Return in the Following Year
  1. Obtain an energy certificate (before the works): Without this document, the IRPF deduction is not possible. Engage a qualified technician (a técnico competente).
  2. Contact your local council: Ask the Ajuntament about the current IBI and ICIO bonus rate and the conditions applicable to your planned works.
  3. Apply for planning permission (if required): PV systems above certain sizes, Aerotermia outdoor units and insulation works may require planning permission. Apply for the ICIO discount at the same time – it cannot be applied for retrospectively.
  4. Installation by a certified specialist company: Only installations carried out by approved companies are eligible for funding. Ask to see certificates in advance.
  5. IDAE application (when the programme is open): Prepare the documentation: monitoring evidence, proof of the building's legal status, quotes, installation record. Submit via the Balearic Islands portal.
  6. Energy performance certificate following the work: Required for the IRPF deduction. It documents the improvement and determines the applicable deduction rate (20, 40 or 60 %).
  7. IRPF declaration: Claim it in the following year's tax return – or have it entered by your gestor fiscal.
  8. IBI application with the Ajuntament: Submit the form and attach proof of installation. In Palma the bonus takes effect from the tax year in which the application is made.

The most common mistakes when applying for renovation funding in Mallorca

Mistake 1: Forgetting the ICIO discount Many property owners apply for the IBI bonus but forget the ICIO discount, which can only be requested at the time of the building permit application – not retrospectively.

Mistake 2: No energy performance certificate before the work Anyone who only thinks about the energy performance certificate after the renovation loses the IRPF deduction entirely. The document must record the baseline condition.

Mistake 3: Non-legal building for an island installation For off-grid PV systems on fincas without a valid building permit or cédula de habitabilidad there is no IDAE funding available. Resolve the Schwarzbaulegalisierung first.

Mistake 4: Retrofitting a battery without new PV Adding a battery retrospectively to an existing older system is not eligible for funding under the IDAE programme conditions.

Mistake 5: Wrong installer Funding programmes require certified installation companies. Non-certified firms put the approval at risk – including retrospectively.

Mistake 6: Applying too late The IDAE 2026 round closed once the budget was exhausted – not at the formal deadline. Anyone who waits for "until the date" risks finding the pot already empty.

What comes next? Combining funding with increased property value

An energy-retrofitted property in Mallorca benefits in several ways simultaneously: lower running costs, a higher resale value, and in some cases improved rental appeal. A good energy certificate (Class A or B) has become a measurable factor in price negotiations — for both long-term rental prospects and buyers.

If you are considering letting the property after renovation, it is worth consulting the guide on Long-term rental in Mallorca — energy-efficient properties are increasingly commanding a premium there. Investors who want to factor in the full tax implications of a renovation will also find the overview on Taxes & Legal well worth reading.

Checklist: applying for renovation funding in Mallorca

  • Energy certificate before the works in place
  • Property legally compliant (planning permission / cédula de habitabilidad up to date)
  • IBI bonus rate enquired about with the Ajuntament
  • ICIO discount applied for simultaneously with the planning permission application
  • Certified installation company commissioned
  • Monitoring system for PV installation planned (mandatory for IDAE)
  • No feed-in restriction envisaged
  • Energy certificate after the works commissioned
  • IDAE application prepared (for the next tender round)
  • IRPF deduction planned with gestor fiscal for tax return

Conclusion

Renovation funding in Mallorca in 2026 is a multi-layered yet accessible system: the IRPF tax deduction (20–60 %) is available immediately, the IBI bonus in Palma (up to 100 %, max. 12.000 €) as well, and the ICIO discount (up to 95 %) applies with a timely application. The IDAE photovoltaic programme of the Balearic Islands (600 €/kWp, 420 €/kWh storage) is currently paused following an exhausted budget in the last round — a new call with an expanded budget is expected. Those who prepare their documentation now will be ready to benefit as soon as the next round opens. The 25-million-euro asbestos scheme under NextGenerationEU is running in parallel. Ultimately, by cleverly combining all levels of funding, a substantial portion of renovation costs can be offset — provided the applications are submitted in the correct order and with the correct documents.

Official sources

Can I apply for renovation funding in Mallorca as a non-resident?
The IBI bonus and the ICIO discount can in principle be applied for by any property owner regardless of residency status. The IRPF tax deduction, however, applies only to persons who are tax-resident in Spain. It is worth checking whether alternative provisions under the Modelo 210 may be applicable.
What is the maximum IBI bonus in Palma for a photovoltaic system?
Palma has granted an IBI discount of 100 % for residential properties with energy-efficiency measures such as solar installations or Aerotermia since January 2023, capped at a maximum of 12.000 Euro.
Is the IDAE grant for PV systems in the Balearic Islands still available?
The 2024–2026 funding round closed on 30 April 2026 following the exhaustion of the budget of 4 million Euro. A new round with an expanded budget is anticipated — the exact start date had not yet been confirmed at the time of publication.
What happens if I forget to apply for the ICIO discount?
The ICIO discount must be applied for simultaneously with the building permit application. Retrospective applications are not possible. The oversight cannot be rectified.
Are Aerotermia systems eligible for funding?
Yes. Aerotermia qualifies in Palma for the IBI bonus (up to 100 %), can trigger the ICIO discount, and — where a measurable improvement in energy efficiency is achieved — gives rise to an IRPF deduction of 20–60 %. The precise conditions vary depending on the municipality.
Does my Finca need a valid building permit in order for me to receive funding?
For off-grid PV systems (island systems) in rural areas, the IDAE programme explicitly requires proof of the building's legal status — either a current building permit or a certificate of habitability (cédula de habitabilidad).
Can I use the IRPF deduction and the IBI bonus at the same time?
Yes, the two instruments operate at different levels (income tax vs. property tax) and are not mutually exclusive. Combining them is expressly permitted.
What documents do I need for the IDAE application?
For the photovoltaic programme, the documents typically required are proof of the building's legal status, technical documentation for the installation (including evidence of a monitoring system), photographs of the completed installation, and invoices from the installer.