The Balearic Islands have recorded an all-time high in tourist tax revenue, approaching £200 million, contributing to economic growth and environmental programs.

In 2024, the controversial tax in the Balearic Islands brought in £118 million, marking a significant £3.8 million increase from the previous year.

The tax applies to most tourists, including those staying in hotels, private villas, and cruise ships.

The rate depends on the type of accommodation and the season, typically charged per person per night, with an additional 10% VAT included in the total.

Revenue from this levy is used to enhance infrastructure, protect the islands' natural beauty, and fund environmental initiatives.

In 2024, the Balearic Government reported its highest-ever total tax revenue of £3.6 billion, reflecting a rise of over £663 million compared to 2023.

This milestone was reached despite changes to inheritance and wealth taxes, including the abolition of inheritance tax in most cases and a substantial rise in the wealth tax threshold.

The surge in tax revenue is driven by the Balearic Islands' strong economic growth, leading to higher tax contributions from residents. Income tax was a key factor, rising by £510 million to a total of £1.7 billion.

IVA (VAT), experienced a significant boost, rising by £52 million to reach £1.5 billion. Likewise, special taxes, primarily excise duties and environmental levies, increased by £107 million, totalling £393 million.

Meanwhile, the property transfer tax fell by nearly £165 million in 2023 due to a slowdown in the property market caused by rising interest rates. However, 2024 saw a modest rebound with an increase of £16 million, bringing the total to £544 million.

The Balearic government noted that the 2024 financial results reinforce its view that lowering certain taxes can stimulate growth in others, as higher disposable income boosts consumer spending.

Vice President and Finance Minister Antoni Costa underscored that boosting economic activity enables tax reductions while also increasing social spending.