The 2024 income tax return, which we will file in 2025, introduces significant changes that will affect all individuals residing in Spain, particularly in regions such as the Balearic Islands. In addition to the general amendments adopted at the national level, our region has introduced specific tax benefits that should be taken into account in order to optimize their application.

This year, the campaign begins earlier than usual, starting on April 2nd and ending on June 30th. A notable development is the increase in income thresholds that determine the obligation to file a tax return. Individuals who have received more than €22,000 from a single payer are required to file, while those with multiple payers will benefit from a significant increase in the threshold, from €1,500 to €2,500 from the second payer onwards. Furthermore, all recipients of unemployment benefits are obliged to file a tax return, regardless of the amount received.

Substantial changes have also been introduced to the tax reduction for rental income derived from the principal residence. From January 1st, 2024, these reductions depend on the date of the contract and other specific conditions. For contracts signed before May 26th, 2023, the 60% reduction on net rental income is maintained. For newer contracts, the reductions will apply based on the specific characteristics of the lease:

• 90% if the rent has been reduced by more than 5% compared to the previous contract in a highly stressed area;
• 70% for first-time leases in stressed areas to young individuals or to public or non-profit entities;
• 60% for recently renovated properties;
• 50% in all other cases.

In the Balearic Islands, the regional deductions for tax residents are particularly noteworthy. Property owners who rent out their dwellings can deduct up to 75% of default insurance premiums, with an annual cap of €440. In addition, expenses related to maintenance, repairs, community fees, damage insurance, and property taxes can be deducted up to €1,500 annually, with the possibility of increasing this to €1,800 depending on specific circumstances.

Further benefits are granted to those who bear costs for the care of elderly or dependent persons, with deductions of up to €660 per year for services such as residential care, day centres, or the formal hiring of caregivers, provided payments are made via bank transfer and certain income thresholds are respected.

Families with school-aged children may benefit from deductions for school books, up to €220 per child, increased to €350 in special situations such as large families, single-parent families, or families with disabled children. Deductions are also available for extracurricular foreign language lessons, with a maximum of €110 per child.

Lastly, the deduction for the rental of the main residence is maintained, allowing for up to 15% of the rent, with a maximum of €400 per year, to be deducted, provided specific income requirements are met.

In conclusion, being well informed and properly advised is key to successfully filing this income tax return. It is crucial to rely on professional tax advice, which facilitates not only understanding but also the effective application of these new measures. When completing the tax return, special attention should be paid to the sections concerning changes in personal circumstances, tax-exempt income, national and regional deductions, mortgage payments, pension plans, donations, etc., as these elements have a direct impact on the final result and may determine whether a refund is received or, at the very least, whether the amount payable to the Tax Agency is minimized.