Balearics unlock 2025 budget surplus for housing

The Balearic Islands can use budget surpluses from 2025 for housing and sustainable projects in 2026 and 2027. Spain’s Cabinet approved the change in Madrid on Tuesday, 8 September. Finance Minister Arcadi España said the new decree-law gives regional governments more room to finance both areas.

The Balearics are among eight regions covered by the measure, alongside Asturias, the Canary Islands, Navarre, the Basque Country, Andalusia, Cantabria and Galicia. The government says the rules could release almost 4,000 million euros for investment across those territories.

Extra room for regions with lower debt

Regions whose debt stood below 12.4% of gross domestic product at the end of 2025 can also use surpluses from earlier years. Those projects may be carried out in 2026, 2027 and 2028.

That spending will not count towards the expenditure rule. Until now, the budget-stability law generally required the money to go towards cutting debt instead.

What counts as a sustainable project

The government defines financially sustainable investment as spending that strengthens a regional authority’s public finances over the long term. It must also remain compatible with budget-stability and public-debt targets while it is built, maintained and closed down.

Projects must be economically viable over their whole working life. They will be excluded from the expenditure rule in the year they are delivered, but will still count towards the budget-stability target.

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Source: Europa Press / Mallorca.com