Palma plans €95 million investment despite tax cuts

Palma, Mallorca: the city plans €95 million in investment in its 2027 budget despite cuts to several taxes. Finance councillor Mercedes Celeste sets out the plan on 6 November 2026. The proposed budget totals more than €670 million.

More investment, but debt may rise

The investment figure is €5 million higher than in 2026. The council says the budget will put more money into neighbourhoods, staffing, infrastructure, public safety, cleaning, transport and care services.

Palma’s debt fell from €175.7 million in 2023 to €163.5 million at the end of 2025. Its debt ratio dropped from 38.2% to 31.1% over the same period. But the council expects debt to reach €167.9 million by the end of 2026.

Tax cuts and the next steps

Celeste says the city has reduced the burden of property tax and the tax on business activity. The rate for plusvalía, a tax on increases in property value, has been 18% since 1 January 2026; it had reached 25% in 2022. For the tax on building work, installations and construction, the city retains a deduction worth 50% of planning-permit fees already paid.

The finance department plans to add a head of service and a head of department, while the property department will gain a staff member. Once the budget is approved, the council intends to seek bids for one insurance contract covering the whole authority, replacing separate policies.

Topics: Politics · Economy · Palma

Source: Europa Press / Mallorca.com