Balearic Islands – New tax measures in 2024

The recently published Act 12/2023, of December 29, on the 2024 General Budgets of the Autonomous Region of the Balearic Islands ("LPGIIBB") adopts a series of tax measures that aim to reduce the tax burden of tax residents in the region, effective from January 1, 2024.

These measures include a major amendment to the wealth tax imposed on assets in 2024, as the lump-sum exemption has risen from €700,000 to €3,000,000. This means that tax residents of the Balearic Islands with a net worth exceeding €700,000 (the minimum exempt amount set in 2023) that had been subject to this tax will not have to pay wealth tax in 2024 on assets for a value of up to €3,000,000.

The new lump-sum amount also benefits non-residents that own rights and assets located in the Balearic Islands. For this purpose, it will be necessary to substantiate that of all the rights and assets a taxpayer owns in Spain, those of greater value are located on the Balearic Islands.

This measure is in line with the threshold of wealth that triggers the temporary solidarity tax on large fortunes ("ITSGF"), the application of which has been extended under Royal Decree law 8/2023, of December 27, adopting measures to address the economic and social consequences of the conflicts in Ukraine and the Middle East, and to alleviate the effects of the drought.