IRPF Deductions Balearic Islands: All Regional Tax Deductions for Residents

Anyone who is tax-resident in the Balearic Islands pays not only the state portion of IRPF – roughly half of the total tax rate is allocated to the autonomous community, and that is precisely where real savings can be made with the right deductions. The so-called deducciones autonómicas of the Illes Balears reduce the regional tax liability directly – meaning not just the taxable base, but the actual amount you transfer. In this guide you will find out which deductions apply for the 2025 tax year (Renta campaign 2026), what conditions you must meet, how the important changes introduced by Ley 7/2024 affect landlords, and how you can claim solar panels, rental costs, school books and language courses for tax purposes – all based on official AEAT and ATIB documentation.

Would you like to know which deductions genuinely apply to your personal situation?

• 📩 Submit a personal enquiry — no obligation, in German, fast response
• Taxes as a resident on Mallorca – an overview

How do regional IRPF deductions actually work?

Spanish income tax (IRPF) consists of two halves: a state portion and a regional portion, which each autonomous community is free to shape as it sees fit. The deducciones autonómicas apply exclusively to the regional portion – the so-called cuota íntegra autonómica. This means they do not reduce your taxable income (as an allowance would), but cut the tax amount directly, euro for euro.

The legal basis in the Balearic Islands is Decreto Legislativo 1/2014 (Texto Refundido de las disposiciones legales de la Comunitat Autònoma de les Illes Balears en matèria de tributs cedits per l'Estat). This framework was most recently substantially amended by Ley 7/2024 of 11 December 2024 ("Ley de medidas urgentes de simplificación y racionalización administrativas") – in particular with new deductions for landlords letting long-term residential property.

Please note: The deductions apply only to individuals with tax residency in the Balearic Islands during the relevant tax year. Anyone who moved there part-way through the year may be able to claim the deductions on a pro-rata basis – or, depending on the specific rule, for the full year, provided residency was established by 31 December. More on residency: Residencia in Spain.

Overview: All deductions for the 2025 tax year

The AEAT lists the following deducciones autonómicas for the Illes Balears in the official IRPF 2025 practical guide:

Deductions 7 and 8 were introduced by the Ley 7/2024 and apply for the first time to the 2025 tax year.

Deduction 1: Sustainable investments in the primary residence (photovoltaic systems & similar)

Anyone who invests in improving the energy efficiency of their primary residence – including photovoltaic systems, thermal insulation, or the installation of efficient heating systems – may claim a regional IRPF deduction in the Balearic Islands. This regional deduction is in principle combinable with the national deduction for energy renovation under Königlichen Dekret-Gesetz 19/2021, which provides for deductions of 20 to 60 %.

Please note: The national deduction for energy renovation (20–60 %) is based on Königlichen Dekret-Gesetz 19/2021 and must be considered separately from the regional deduction. The regional Balearic deduction is subject to its own limits and requirements, as governed by Decreto Legislativo 1/2014. An energy certificate is generally required as proof.

Combining both levels – national and regional – can, under certain circumstances, significantly increase the overall tax relief for a photovoltaic system in the Balearic Islands, provided all conditions are met. Specific percentage figures for the regional Balearic element can be found in the current AEAT handbook IRPF 2025 (chapter Illes Balears, section 1).

Deduction 2: Rent for the primary residence (as a tenant)

Tenants who are tax-resident in the Balearic Islands as their primary place of residence may claim a deduction for the annual rent paid. This deduction is enshrined in Decreto Legislativo 1/2014 and applies to rental agreements for the habitual residence – and not to holiday lets or second homes.

Please note: Income thresholds and the maximum deduction amount are set out in regional tax law. Those whose income exceeds a certain threshold will receive a reduced deduction or none at all. The precise current threshold values can be found in the official AEAT handbook IRPF 2025 (chapter Illes Balears, section 2).

This deduction is particularly relevant in Palma and other areas with high rental costs – find out more in the guide Renting a flat as a foreigner.

Deductions 7 & 8 (new from 2025): Landlords of long-term residential property

Arguably the most significant change for the 2025 tax year comes from the Ley 7/2024 vom 11. Dezember 2024. It adds two new deductions to Article 4 quater of Decreto Legislativo 1/2014 for landlords who let properties on a permanent basis (as vivienda permanente) in the Balearic Islands – and not for short-term tourist lets.

Deduction 7: Insurance premiums and direct costs

Landlords may deduct, once in the first tax year in which all conditions are met, 50 % of the following expenses:

• Premiums for damage insurance (primas de seguros de daños)
• Maintenance and repair costs (conservación y reparación)
• Costs relating to the owners' community (comunidad de propietarios)
• Tax-related expenses connected with the property (gastos tributarios)
• Costs for formalising the tenancy agreement
• Costs for energy efficiency certificates

Note: This deduction applies only once in the first year in which all conditions are fully met for the first time. It can be combined with the existing deduction under paragraph 1 of Article 4 quater of Decreto Legislativo 1/2014.

Deduction 8: Other additional costs

In addition to this – and likewise introduced by Ley 7/2024 – there is a deduction for further costs associated with long-term letting, provided they are not already covered under Deduction 7. Here too, a percentage applies to the recognised expenditure; the exact amount is set out in the amendment to Article 4 quater.

Please note: These deductions apply expressly only to long-term letting (vivienda permanente), not to tourist letting (ETV). Anyone who holds or is seeking a holiday licence does not fall under this provision.

Deductions 4 & 5: School textbooks and foreign language courses

Two further Balearic deductions are particularly useful for families with children:

School textbooks (Deduction 4): The actual expenditure on purchasing school textbooks (libros de texto) can be deducted up to a certain limit. The deduction requires that the child is enrolled in a state or publicly subsidised school system in the Balearic Islands.

Out-of-school foreign language courses (Deduction 5): Costs for out-of-school foreign language courses (aprendizaje extraescolar de idiomas extranjeros) are also deductible. This is of particular interest to German-speaking families who enrol their children in language schools or tutoring institutes – English or Spanish courses can also qualify, provided they take place outside school hours and are not part of the regular curriculum.

Please note: Income limits and maximum amounts vary; the current thresholds can be found in the AEAT guide IRPF 2025 for the Illes Balears. Supporting documents (invoices, school certificates) must be retained.

More on the school system: Schools in Mallorca for German-speaking children and International schools in Mallorca.

Deduction 6: Studying outside your home island

If you live in Mallorca and send a child to study on another island (e.g. Menorca, Ibiza) or on the mainland, you can partially deduct the associated costs. This deduction (cursar estudios de educación superior fuera de la isla de residencia habitual) is designed to acknowledge the fact that island life makes mobility more expensive than on the mainland.

The requirement is that the studies take place at a recognised higher education institution and that the family has its tax residence in the Balearic Islands.

Deduction 3: Subsidies following a disaster declaration

This deduction applies when state or regional subsidies or assistance have been granted because an area has been designated a zona afectada gravemente por una emergencia de protección civil (area seriously affected by a civil protection emergency). For most new arrivals this deduction is less relevant, but it is included here for the sake of completeness as part of the Balearic catalogue.

What you need for your tax return: step by step

You do not apply for the deductions separately with the ATIB; instead, you enter them directly in your Renta return – either via the AEAT portal (Renta Web) or through a tax adviser or gestoría.

1. Confirm tax residence: On 31 December of the tax year you must have your main residence in the Balearic Islands. Without padrón registration and proof of residencia, the deductions cannot be applied. → padrón registration in Mallorca
2. Collect supporting documents: Invoices, rental agreements, insurance policies, school certificates, energy certificates – depending on the deduction. Keep everything for at least four years (IRPF limitation period).
3. Obtain a Certificado Digital: Without a digital certificate or Cl@ve you cannot use Renta Web in full. → Apply for a Certificado Digital
4. Open Renta Web and review the draft (borrador): The AEAT pre-fills a proposed return. Regional deductions are often not entered automatically — you need to add them manually.
5. Complete the boxes for Balearic deductions: These are found in the "Deducciones de la Comunitat Autònoma de les Illes Balears" section of the return.
6. Check income limits: Many deductions are subject to income ceilings (generally based on the total base imponible). Check whether you fall below them.
7. Submit your return: The deadline for the Renta 2025 is 30. Juni 2026.

Important: If the AEAT does not show a deduction in the draft (borrador), that does not mean you cannot claim it. You are entitled to correct the draft. If in doubt, a Gestoría in Spanien.

Combining multiple deductions: what is possible?

The Balearic deductions are not mutually exclusive as a rule — you can claim several at the same time, provided you meet the respective requirements. Particularly effective combinations include:

Important: The total of all regional deductions may not exceed the regional tax liability (cuota íntegra autonómica) — a refund beyond zero cannot be generated from regional deductions alone.

The most common mistakes with the Balearic IRPF deductions

• Overlooking deductions in the borrador: The automatically generated AEAT draft frequently does not include regional deductions. Anyone who submits it without checking is leaving money on the table.
• Failing to check income limits: Many deductions are income-dependent. If the taxable base above the threshold, the deduction is reduced or withdrawn entirely.
• Wrong municipality of residence: Anyone registered outside the Balearic Islands on 31 December (e.g. having returned to Germany) is not entitled to the regional deductions.
• Landlord deductions applied to holiday lets: The new deductions 7 & 8 apply exclusively to long-term rentals, not to ETV or tourist use.
• Receipts not retained: The AEAT can request supporting documents up to four years after submission. Missing receipts result in clawbacks plus interest.
• Student deduction overlooked: Families with children on the mainland or other islands in particular regularly forget this deduction.

Checklist: Are you ready for the Renta 2025?

• Empadronamiento in the Balearic Islands present on 31.12.2025
• NIE number and NIF correctly registered → NIE-Nummer Mallorca
• Certificado Digital or Cl@ve PIN active
• Rental agreement and receipts (for deductions 2, 7 & 8) complete
• Invoices for school books and language courses collected
• Energy certificate for photovoltaic/renovation available
• Insurance policies set aside for landlord deduction 7
• Income limits checked against current borrador
• Tax adviser or gestoría engaged for complex cases
• Submission planned by 30 June 2026

What comes next? Further tax obligations as a resident

The IRPF deductions are just one part of your tax situation in the Balearic Islands. Depending on your circumstances, additional obligations may apply as a resident:

• Modelo 720: Reporting requirement for assets held abroad exceeding €50,000 → Modelo 720
• German pension: Anyone receiving a statutory pension from Germany is taxed on it in Spain under certain conditions → Rente in Spanien versteuern
• Wealth Tax (Patrimonio): The Balearic Islands have their own allowances and rates; this becomes payable above a certain level of net assets.
• Beckham Law: Those using the special taxation scheme under the Regimen de impatriados cannot claim any regional deducciones autonómicas → Beckham Law Spanien
• Autónomo: Self-employed individuals have additional deduction options at the national level → Autónomo Spanien

Conclusion: Make active use of regional deductions – don't leave money on the table

The deducciones autonómicas of the Balearic Islands are not a luxury reserved for tax experts, but a genuine opportunity to save money for every resident. Whether you are a tenant, operate a photovoltaic system, send children to school, or let out long-term residential property – almost every household can make use of at least one of the eight regional deductions. In particular, the new landlord deductions introduced by Ley 7/2024 send a clear signal from the legislature: those who provide long-term residential accommodation are rewarded with tax relief.

The crucial step: never submit the borrador from the AEAT without reviewing it, but always add the Balearic deductions in the relevant section. Anyone who is unsure will quickly find guidance from a good Gestoría – or can simply submit a personal enquiry.

Official Sources

• AEAT – IRPF Manuals 2025, chapter on Deducciones Autonómicas, Illes Balears: sede.agenciatributaria.gob.es – Comunidad Autónoma de les Illes Balears
• ATIB – Agència Tributària de les Illes Balears (new measures under Ley 7/2024): atib.es – Nuevas medidas tributarias autonómicas en el IRPF
• BOE – Decreto Legislativo 1/2014, de 6 de junio (Texto Refundido tributos cedidos Illes Balears): boe.es/buscar/act.php?id=BOE-A-2014-6925
• AEAT – Regional IRPF deductions by autonomous community (overview): sede.agenciatributaria.gob.es – IRPF deducciones autonómicas
• Iberley – Balearic Islands introduces new provisions for deducciones autonómicas (18.12.2024): iberley.es