Balearic Islands to raise tourist tax and put levy on hire cars

Telegraph

08-03-2025

The Balearic Islands is to increase its tourist tax and put a new levy on hire cars as the archipelago announced a set of 'tourism containment measures' on Friday.
The tourist tax, also known as the 'eco-tax', will rise from €4 to a maximum of €6 a night per person in peak summer months, although plans still need to be approved by the regional parliament.
The levy is meant to finance environmental projects but has been used for a range of schemes, including a Covid relief fund.
It will be applied at four different rates across 10 months from March to December, with January and February being exempt.
The rise will add an extra €56 to the cost of a fortnight in Majorca, Ibiza or Menorca for a couple during the peak months, but under-16s are expected to remain exempt from the charge.
Cruise passengers visiting the Balearics in June, July and August will see their 'eco-tax' tripled from two euros to six euros for each night they stay.
The planned levy on hire cars will be for vehicles arriving on the islands from elsewhere, affecting tourists and hire car companies who ship in vehicles for the summer months.
Jaume Bauzá, tourism minister in the conservative People's Party Balearic government, said: 'The islands have reached their limit.'
The proposals will also raise the fine on holiday rental platforms advertising unlicensed properties to €500,000, as well as ban new holiday rental flats within residential apartment buildings.
The move comes after protests over the past year against the impact of tourism, particularly on housing, with locals saying they are being priced out of the rental market.
A study by Fotocasa, the housing platform, last year showed that the average monthly rent in the Balearics had risen from €562 to €1,451 in a decade, with prices considerably higher in hotspots such as Palma de Mallorca.
Tourism on the rise
Despite efforts to tackle over-tourism, the sector grew in 2024, with the Islands welcoming 18.7 million visitors, a rise of five per cent.
About 15.3 million of the visitors were foreigners, with Germans and Britons being the most common overseas guests.
Bringing in 22.4 billion euros per year, tourism represents more than half of the Islands' GDP.
Margalida Prohens, the Balearic premier, last week presented a major review of the tourism sector to facilitate a 'transition to sustainability'.
She said the report would provide the basis for 'a long-term process, which goes beyond any particular legislature or government mandate'.
Ms Prohens has said she will not shirk difficult decisions and has not ruled out imposing a numerical limit on tourist numbers, which is something no Balearic government has done.
'Discriminatory and revenue-seeking'
Friday's announcement drew sharp criticism from the Balearics' tourism industry associations.
Majorca's hotel federation said that the 'eco-tax' hike would have a direct impact on tourists' spending capacity, affecting shops, restaurants and the leisure sector.
The same association however welcomed stricter measures against unlicensed holiday rental homes, although it complained about a 'lack of courage' in merely imposing a ban on new holiday apartments in residential blocks as opposed to a reduction in existing ones.
The islands' Baleval car rental association described the proposed new tax on tourist vehicles as 'discriminatory and revenue-seeking', warning that it will not succeed in decongesting the archipelago's roads, notorious for their high-season traffic jams.