The Balearic Islands’ controversial tourist tax brought in £118 million in 2024 – a significant increase of £3.8 million on the previous year.
The levy applies to most tourists, including those staying in hotels, villas, and cruise ships.
The rate of this tax varies depending on the type of accommodation and season, and it’s typically charged per person per night, with an additional 10% VAT added to the total amount.
The revenue generated from this tax is used to enhance infrastructure, preserve natural beauty, and protect the environment.
In 2024, the Balearic Government recorded its highest-ever tax revenue at £3.6 billion, marking an increase of just over £663 million compared to 2023.
This was despite the adjustments to inheritance and wealth taxes. The inheritance tax was abolished for the majority of cases, and the wealth tax threshold was significantly raised.
The surge in tax revenue can be attributed to the thriving Balearic economy, with residents paying more in taxes due to economic growth. Income tax revenue accounted for the majority of the increase, rising by £510 million to £1.7 billion.
The government also saw significant gains from IVA (VAT), a state tax, which increased by £52 million to £1.5 billion, and so-called special taxes, primarily excise duties and environmental taxes, which rose by £107 million to £393 million.
Property transfer tax fell by nearly £165 million in 2023 due to a market slowdown triggered by rising interest rates. However, there was a slight recovery in 2024 – up £16 million to £544 million.
The Balearic government said the 2024 results validate its belief that lowering certain taxes leads to an increase in others as people have more money, stimulating spending.
Vice President and Finance Minister Antoni Costa said that if economic activity is stimulated, taxes can be reduced and social spending can be increased.
