Improving the thermal insulation of a home in Mallorca cuts the electricity bill by 20 to 35%, improves comfort in summer and winter, and raises the property's value by 5 to 15% by improving its energy rating.
In 2026, a large part of that investment is recovered through grants and tax relief: PIREP Balears (up to 80%, funded by Next Generation EU), PREE 5000 (next call expected in 2026), Spanish income-tax (IRPF) relief of 20/40/60% under RD 19/2021, ICO Verde subsidised loans and Palma's Rehabilita Plan. This guide compiles every active route.
To improve your property's rating, see how to improve the energy certificate in Palma. For villas in Calvià, thermal insulation for villas in Calvià. For the systems we install, thermal insulation with drywall in Mallorca.
1. IRPF Income-Tax Relief for Energy Efficiency (RD 19/2021)
Spanish Royal Decree-Law 19/2021 and its extensions establish three deductions in IRPF (Spanish personal income tax) for works on a home. All three require an energy performance certificate (CEE — Spain's equivalent of the UK EPC) before and after the works.
A note for non-resident owners: the IRPF relief can only be claimed by Spanish tax residents who file Spanish income tax. If you own a Mallorca property but are taxed as a non-resident (IRNR), this deduction is not available to you — the PIREP grants and municipal IBI rebates described below, however, do not depend on your tax residency (though some grant calls require the property to be a habitual residence; check each call's terms).
20% Relief — Cutting Heating/Cooling Demand
Applies when the works cut the combined heating and cooling demand by at least 7%. A drywall wall lining with mineral wool on the façade usually meets this threshold.
- Maximum base: €5,000 per tax return.
- Maximum relief: €1,000.
40% Relief — Cutting Non-Renewable Primary Energy Consumption
Applies when the works cut non-renewable primary energy consumption by at least 30%, or raise the energy rating to A or B.
- Maximum base: €7,500 per tax return.
- Maximum relief: €3,000.
60% Relief — Energy Renovation of the Whole Building
Applies when the works cover the entire residential building (community of owners) and achieve a 30% cut in non-renewable primary energy or an A/B rating.
- Maximum base: €5,000/year, cumulative over up to 4 tax years.
- Maximum relief: €3,000/year, cumulative total up to €9,000.
How It Works in Practice
A drywall wall lining with thermal insulation costing €3,000, with a demand reduction ≥ 7%:
- Pre-works energy certificate (€150-250).
- Works executed with an itemised invoice.
- Post-works certificate evidencing the improvement.
- 20% relief in the tax return: €600 recovered via IRPF.
If the improvement reaches a 30% cut in primary energy, the 40% relief applies: €1,200 recovered.
2. PIREP Balears and Next Generation EU
The Govern de les Illes Balears (the regional government) manages, through IBAVI (the Balearic Housing Institute) and the regional Housing Department, residential renovation programmes funded by the EU Recovery, Transformation and Resilience Plan (Next Generation EU).
PIREP Balears: Up to 80% of the Cost
The renovation drive programme (PIREP Balears) covers between 40% and 80% of the cost of energy-improvement works on residential buildings. Amounts and deadlines are published in the BOIB (the official gazette of the Balearic Islands).
Usual requirements:
- Home or building built before 2007.
- Evidenced improvement of at least one letter in the energy rating.
- Minimum 30% cut in non-renewable primary energy consumption (for the higher funding brackets).
- Works executed by a registered company with invoice, tax registration and insurance.
- Pre- and post-works energy certificates registered with IBAVI.
PREE 5000 (Next Call Expected in 2026)
The energy renovation programme for small municipalities (PREE 5000) is activated periodically, with a new call expected for 2026. It covers Mallorca municipalities with fewer than 5,000 inhabitants.
How to Check Open Calls
- Govern Balear website: caib.es.
- IBAVI (Institut Balear de l'Habitatge — the Balearic Housing Institute).
- BOIB (the official gazette of the Balearic Islands).
3. ICO Verde: Subsidised Green Loans
The ICO Verde line from Spain's Official Credit Institute offers subsidised loans for residential energy renovation, with reduced interest rates and terms of up to 20 years. It can be combined with PIREP and the IRPF relief.
4. Palma's Rehabilita Plan and IBI Property-Tax Rebates
Palma City Council runs the Rehabilita Plan for improvements to homes in the historic centre and priority-renovation districts (Arxiduc, La Soledat, Son Gotleu).
IBI Rebate for Energy Efficiency
IBI is the Spanish municipal property tax — the closest equivalent of UK council tax. Mallorca municipalities with an IBI rebate in force in 2026 (check each municipal tax ordinance):
- Palma: 20-50% IBI rebate for 3-5 years for an A or B energy rating.
- Calvià, Marratxí, Inca, Manacor: similar rebates depending on the ordinance.
The rebate is applied for with an energy certificate registered with IBAVI and a certificate of correct execution of the works.
5. Drywall as an Eligible Intervention
Drywall wall linings with thermal insulation are fully eligible under every route described. Typical interventions:
Façade Wall Lining
A second leaf of drywall (12.5 mm BA13 board or 15 mm Placo Habito on CW48 studs) fitted against the existing façade, with the cavity filled with 60-80 mm Isover Arena mineral wool (40-60 kg/m³), 60 mm Rockwool, extruded polystyrene (XPS) or spray polyurethane (PUR). Compliant with Spanish CTE DB-HE §3 for Mallorca's climate zone B3. Cuts losses in winter and heat gains in summer. Cost €35-48/m².
Party-Wall Lining
The same principle on walls adjoining unheated dwellings, garages or lightwells. Less impact than the façade, but improves the envelope overall.
False Ceiling with Insulation
For homes under a roof terrace or directly under the roof. A drywall false ceiling (BA13 board on F47 framing) with 60-80 mm Isover Arena mineral wool cuts losses through the roof. Cost €35-50/m².
See thermal insulation in Mallorca for full system details.
Typological Pattern: 75-85 m² Flat in Santa Catalina (Palma)
A common pattern in 75-85 m² flats in 1970-1985 buildings in Santa Catalina, El Terreno and Pere Garau (Palma), with a single-leaf brick façade without a cavity and west orientation — typically an F energy rating.
Before the renovation (typical values):
- Façade U-value: 1.1-1.3 W/m²K.
- Summer A/C bill: €160-200/month.
- Winter heating bill: €100-140/month.
- Rating: F.
After (BA13 drywall lining on CW48 studs + 60 mm Isover Arena mineral wool):
- U-value: 0.30-0.38 W/m²K (meets Spanish CTE DB-HE §3 for zone B3 with margin).
- Summer A/C bill: €95-130/month.
- Winter heating bill: €65-85/month.
- Rating: C.
Indicative investment figures:
- Typical total investment: €4,500-5,300 (façade wall lining + insulated false ceiling, 80 m² × ~€60/m²).
- Indicative annual saving: ~€400 A/C + ~€180 heating = €550-700/year.
- Payback without grants: 7-9 years.
- With the 40% IRPF relief (up to €3,000 back on a €7,500 base): real cost €2,700-3,200, payback 4-6 years.
- With the 40% IRPF relief + 40% PIREP Balears: real cost €900-1,300, payback 1.5-2.5 years.
Quick Calculator: Real Cost After Grants
Step 1 — Cost of the works. Wall lining with insulation: €35-60/m² depending on insulant and complexity. A typical home with 60-80 m² of façade: €2,100-4,800.
Step 2 — IRPF relief. Improvement ≥ 7% in demand: 20%. Improvement ≥ 30% in primary energy: 40%.
Step 3 — PIREP Balears. 40-80% of the remaining cost, depending on the call.
Example: 60 m² flat with a wall lining at €45/m²:
- Works: €2,700.
- 40% IRPF relief: -€1,080 → partial cost €1,620.
- 40% PIREP Balears: -€1,080 → real cost €540.
For an exact quote, request your free on-site technical visit.
Worked Example: 80 m² Flat Improving from E to C
An 80 m² flat in Palma with an E rating that improves to C after a façade wall lining + insulated false ceiling:
- Façade wall lining (30 m²): ~€1,050.
- Insulated false ceiling (40 m²): ~€1,400.
- Total cost of works: €2,450.
- 40% IRPF relief (≥ 30% cut in primary energy): -€980.
- Net cost: €1,470.
- Annual electricity saving: ~€450 (25% of an average €1,800/year bill).
- Payback: 3.3 years.
With an additional 40% from PIREP Balears: real cost ~€540, payback ~1.2 years.
General Requirements to Access the Grants
- Pre-works energy certificate in force (maximum 10 years old), registered with IBAVI.
- Itemised quote breaking down materials and labour.
- Executing company with invoice, tax registration and public liability insurance.
- Post-works certificate evidencing a real improvement (≥ 7% demand or ≥ 30% primary energy).
- Payments by bank transfer or card (cash is not accepted for amounts over €1,000).
- Works starting after the grant application date (check each call).
Next Step
The first step is a free on-site technical visit: we assess the state of the home, propose the right solution and advise you on PIREP Balears, PREE 5000, the IRPF relief and the municipal rebates that apply to your case.
Request your free on-site technical visit or call us on +34 627 829 723.
