Balearic Tax Cuts 2026: Zero ITP for Under-36s and 75% Inheritance Relief for Siblings

The Balearic tax cuts announced on 20 October 2026 remove transfer tax (ITP) and stamp duty (AJD) on a first home for residents under 36, halve them up to age 40, and raise inheritance relief between siblings, aunts, uncles and nephews to 75 percent.

President Marga Prohens set out the package in the Balearic Parliament's annual Debate de Política General. It touches two groups we talk to every week in Santa Ponsa: younger families trying to buy their first home on the island, and older owners thinking about who will inherit their property. Here is what was announced, what it means in practice, and what still has to happen before anyone benefits.

What Was Announced

The headline measure is simple. Residents of the Balearic Islands who are under 36 when they buy their first home will pay no Impuesto sobre Transmisiones Patrimoniales (ITP) and no Impuesto de Actos Jurídicos Documentados (AJD) on the purchase. The same exemption applies to people with a recognised disability, with no age limit. Buyers aged between 36 and 40 will pay half of both taxes.

ITP is the regional transfer tax charged on every resale property in Mallorca, and AJD is the stamp duty that applies to notarial deeds. Together they are usually the largest single cost on top of the price of a resale home, so removing them changes the amount of cash a young buyer needs on completion day.

The second measure concerns inheritance. The relief on the Impuesto sobre Sucesiones y Donaciones for siblings, aunts, uncles, nephews and nieces will rise to 75 percent where the person who has died leaves no direct descendants. The package also includes a new regional income tax deduction for young people's savings accounts set aside for buying a first home.

Alongside the tax measures, the President said her government will present a new strategic housing plan, HabitaIB 4+4, before the end of the year. She put the island chain's housing shortfall at no fewer than 17,000 homes and said 2,000 public social homes are already under way.

The First-Home Exemption in Detail

This is not the first help the current government has given younger buyers. Earlier in the legislature it introduced a full ITP exemption for buyers under 30 and a 50 percent reduction for those under 36, and later extended the same treatment to AJD. The new announcement moves the full exemption up from 30 to 36 and adds a half-rate band for buyers aged 36 to 40.

There is one nuance on the mortgage. According to reports from the debate, the full exemption covers the purchase itself, while the AJD charged on the mortgage deed will be cut by half for under-36s and for people with a disability. If you are buying with a Spanish mortgage, that second deed still carries some stamp duty.

The announcement did not include a maximum property price or an income limit. Those conditions, and the exact definition of a first home, will be fixed in the legal text. Until it is published, we recommend treating the headline figures as the direction of travel and checking the final wording with a tax adviser before you sign.

Our earlier guide to first-time buyer tax breaks, grants and mortgages in Mallorca explains the rules that apply today, and we will update it once the new rules are in force.

What It Means for Families and Sellers in Southwest Mallorca

For a young couple living and working on the island, the change is practical. The money that would have gone on ITP and AJD can go towards the deposit instead, which is often the hardest part of buying in Calvià. It also helps parents who want to support a son or daughter: the family contribution goes further when less of it disappears in tax.

The exemption is aimed at residents of the Balearic Islands. A foreign family who already lives here, is registered on the padrón and is tax resident in Spain is in a different position from a non-resident buying a holiday home. A buyer from Germany or the UK purchasing a second home in Santa Ponsa is not the target of this measure and will continue to pay ITP and AJD at the standard rates.

For sellers, the most relevant point is who is buying. Apartments and smaller townhouses in areas such as Santa Ponsa, Son Ferrer and El Toro are exactly the type of property younger resident buyers look for. A purchase that carries less tax for the buyer is easier to finance, and that matters when you are agreeing a price.

The New 75 Percent Inheritance Relief

Inheritance between parents and children, grandparents and grandchildren, and spouses has carried a 100 percent credit in the Balearics since July 2023. The gap has always been the wider family. Since the 2025 budget, inheritances between siblings, uncles, aunts and nephews where there are no direct descendants have received a 60 percent credit. The new announcement lifts that figure to 75 percent.

This matters to many of the owners we know in southwest Mallorca. A widowed or single owner without children often plans to leave the house to a brother, a sister, a niece or a nephew. Until now, those heirs faced a far heavier bill than a son or daughter would. The higher relief narrows that difference considerably.

We covered lifetime gifts to children in our article on Balearic donation tax, and the wider picture in our guide to inheritance and succession planning. Whatever the tax position, a clear will remains the foundation; see whether you need a separate Spanish will.

What Has Not Changed

These Balearic tax cuts deal with regional taxes only. The municipal plusvalía, charged by the town hall on the increase in land value when a property changes hands, is unaffected. So is the seller's capital gains tax, which is a state tax. New-build homes bought from a developer pay VAT rather than ITP, so the transfer tax exemption is relevant mainly to resale properties.

The inheritance changes also do not remove the paperwork. Heirs still file the inheritance tax return with the Balearic tax agency, the ATIB, and the property still has to be declared at its real value for the relief to apply.

When Does It Apply?

No start date has been published yet. The measures were announced in Parliament and still have to be formally approved before they take effect. Until then, the current rules apply, including the existing full exemption for buyers under 30 and the 50 percent reduction for those under 36.

If you are under 36 and close to agreeing a purchase, the timing of completion now matters. Talk to your lawyer about the completion date and keep an eye on the official bulletin, the BOIB, where the final text will appear.

Practical Next Steps

If you are buying, confirm your residence status and your registration on the padrón, check whether this is genuinely your first home, and ask your bank to show the mortgage costs with and without the reduced AJD. If you are an owner planning your estate, review your will with your nieces, nephews or siblings in mind, and take independent advice on how the new relief applies to your family.

If you would like to know what your home is worth today, use our free valuation form, call us on +34 971 692 434, message us on WhatsApp or email help@imperial-properties.com. We have helped families buy and sell in southwest Mallorca since 1985. You can also browse our properties in Santa Ponsa and Nova Santa Ponsa or across Mallorca.