Significant Increase in the Tax Allowance for Wealth Tax on Mallorca
The Balearic government is raising the tax allowance for wealth tax on Mallorca and the neighboring islands from 700,000 euros to three million euros. This adjustment aligns the allowance for this regional tax with that of the Spanish “wealth tax,” resulting in assets up to three million euros being tax-exempt in any case. The increase in the allowance is very good news for the economy and development on Mallorca. In the EU, there are already very few countries that have a wealth tax. Economic activity in the Balearics, a region with strong international influence, declined significantly nine years ago when this tax was introduced. As a result, many entrepreneurs decided to close their establishments or businesses on Mallorca and then only returned as tourists for tax reasons.
The current development could now reverse this trend. Given the growing number of Germans considering a permanent residence on Mallorca, the Balearics and especially Mallorca have created an attractive framework according to experts, by abolishing inheritance and gift tax and by now offering a generous allowance for wealth tax. This is also already reflected in the increased demand for attractive properties.
This is a machine translation of the German article.