In 2026, you can finance part of your home renovation in the Balearic Islands through two options: Next Generation grants for energy rehabilitation, which cover up to 80% of the cost (maximum €18,800 per home) and can be applied for until June 30, 2026, or until funds are exhausted; and personal income tax deductions of 20%, 40%, or 60% for energy improvement works, extended until the end of 2026 and 2027. In both cases, the key is to reduce the home's energy consumption through the renovation.
Home renovations are expensive, but few people take advantage of the available subsidies. And in 2026, real public funding is available for those who improve the energy efficiency of their homes in Mallorca. The problem is that almost no one knows how to access it, what works qualify, and the application deadline. Let's clarify.
What subsidies are available for home renovations in the Balearic Islands in 2026?
In the Balearic Islands, there are two main avenues for home renovation assistance in 2026: the European Next Generation grants for rehabilitation and energy efficiency, managed by the regional government, and the national income tax deductions for energy efficiency improvements. Both reward the same thing: renovations that reduce the home's energy consumption.
The difference lies in how the money is received. The Next Generation grant is direct aid that covers a percentage of the project cost. The income tax deduction is a reduction in the following year's tax return. They are not mutually exclusive in all cases, but it's advisable to plan for both from the project's inception to avoid missing out on either.
How much can you save with Next Generation grants for rehabilitation in the Balearic Islands?
Next Generation grants for renovations in the Balearic Islands cover up to 80% of the renovation cost when energy savings reach or exceed 60%, with a maximum of €18,800 per dwelling; in vulnerable situations, this can reach 100%. The Balearic Government allocated a package of more than €40 million with the aim of renovating nearly 8,700 homes in the islands.
The underlying requirement is to reduce the home's non-renewable primary energy consumption by at least 301%. The deadline to apply is June 30, 2026, or until funds are exhausted, according to information from Ministry of Housing and Urban Agenda and from Government of the Balearic Islands. In other words: if your renovation is a good fit, don't wait.
What income tax deductions apply for home renovations in 2026?
In 2026, three income tax deductions for home energy efficiency improvements will remain in place: from forms 20%, 40%, and 60%, depending on the type of work and the savings achieved. These deductions were extended by the government and are verified with an energy efficiency certificate issued before and after the work.
| Deduction | Which work is awarded | Maximum base | Validity |
|---|---|---|---|
| 20% | Reduce heating and cooling demand by ≥7% | €5,000/year | Until 31/12/2026 |
| 40% | Reduce non-renewable primary energy consumption by ≥30% or achieve an A/B rating | €7,500/year | Until 31/12/2026 |
| 60% | Energy rehabilitation of entire residential buildings | €5,000/year (up to €15,000) | Until 31/12/2027 |
The percentages and conditions are detailed in the Tax Agency. The deduction applies to the amount paid for the work, so keep all invoices and proof of payment by bank transfer.
Which projects qualify for energy efficiency grants and deductions?
Home improvements that measurably enhance the energy efficiency of a property qualify for subsidies and tax breaks. These improvements include insulation, window replacement, efficient heating and cooling systems, and renewable energy sources. The common requirement is to demonstrate the savings with an energy performance certificate issued after the renovation.
The actions that usually fit best:
- Replacement of windows and joinery with models featuring thermal break.
- Insulation of facades, roofs or floors.
- Installation of aerothermal energy and underfloor heating replacing fuel boilers.
- High-efficiency air conditioning systems (aerothermal, heat pump).
- Solar panels and self-consumption.
These projects fit naturally into a comprehensive renovation. That's why the best time to improve energy efficiency is when you're already planning a renovation, something we develop in ecological and sustainable reforms.
How to apply for housing renovation grants in the Balearic Islands step by step?
- Order an energy efficiency certificate for the current state of the property.
- Define with your renovation company which projects will achieve the required energy savings.
- Gather the documentation: initial certificate, project or report, budget and ownership.
- Submit your Next Generation aid application through the Government's electronic headquarters within the deadline.
- Complete the work and obtain the final energy certificate that verifies the savings achieved.
- Justify the action with invoices and a certificate to collect the subsidy and then apply the personal income tax deduction.
The most common mistake is starting construction before you're sure you qualify for the grant. If the certifications or the project plan aren't properly prepared from the beginning, you could lose the subsidy even if the renovation is flawless. That's why it's best to discuss grants during the budgeting phase, not at the end.
When are housing renovation subsidies NOT worthwhile?
The subsidies don't make sense when the renovation isn't aimed at improving energy efficiency: if you're only changing the kitchen or bathroom for aesthetic reasons, there are no energy savings to certify, and you don't qualify. It's also not worthwhile to force an expensive insulation project just for the subsidy if your home is already energy efficient, because the cost won't be recouped.
And you have to be realistic about the deadlines: the Next Generation line of credit has limited funds and a closing date. If you're late or the paperwork isn't ready, it's best to focus on income tax deductions, which are still available in 2026 and 2027. We'll help you assess which option makes sense in your specific case.
Frequently asked questions about grants for home renovations in the Balearic Islands
Until when can I apply for Next Generation aid to renovate my house in the Balearic Islands?
Next Generation grants for rehabilitation in the Balearic Islands can be applied for until June 30, 2026, or earlier if available funds are exhausted. Given the limited budget and high demand, it is advisable to prepare the documentation as soon as possible. Personal income tax deductions, however, remain in effect for works carried out in 2026 and, in the case of form 60%, also in 2027.
Can I combine the Next Generation grant with the personal income tax deduction?
Generally, the income tax deduction applies to the amounts actually paid that were not covered by a subsidy. In other words, you cannot deduct the portion of the project already covered by public funding, but you can deduct the remainder that you paid yourself. It is advisable to review each case with a tax advisor before filing your tax return.
What income tax deduction can I claim if I replace the windows in my home in Mallorca?
Replacing windows with energy-efficient models usually entitles you to a 20% tax deduction if it reduces heating and cooling demand by at least 7%, or a 40% deduction if the renovation reduces non-renewable primary energy consumption by 30%. In both cases, you need an energy performance certificate that verifies the savings before and after the work.
Do I need an energy efficiency certificate to apply for renovation grants?
Yes. Both Next Generation EU funding and income tax deductions require proof of energy savings through an energy efficiency certificate issued before and after the renovation. Without this document, the improvement cannot be demonstrated, and therefore, neither the subsidy nor the tax deduction is available.
Want to renovate and take advantage of the 2026 grants? Let's talk
At Tecnic Project, we plan your renovation to align with available grants from the very first estimate. We are a renovation company in Palma de Mallorca , with fixed labor costs, warranty, and 100% financing. We help you define which projects will achieve energy savings and ensure you don't lose any subsidies. Book your appointment here or write to us from contact, and if you want to see the full scope, visit our page on comprehensive reforms in Mallorca. It's worth it: we argue this in Why invest in a complete home renovation?.
This content is for guidance only and does not replace personalized tax advice or consulting the official terms and conditions of each grant application.
