Balearic Islands President Marga Prohens has announced plans to change regional legislation to allow revenue from the Sustainable Tourism Tax, commonly known as the ecotasa, to fund housing policies again. The proposal marks a reversal of a decision taken by her own government at the start of the current legislature, when it removed housing as an eligible use of the tourism-tax fund.

Prohens made the announcement on 20 October during the regional Parliament’s general policy debate, presenting the change as part of a wider response to the housing crisis. Left-wing parties welcomed the announcement but criticised the government for restoring a measure it had previously abolished.

The proposed change has not yet become law. The government must pursue a legislative amendment before the funding route can be restored.

The policy change introduced in the 2024 budget

When the PP government took office under Prohens, one of its early legislative changes was to remove the possibility of using the Sustainable Tourism Fund to finance housing and employment policies.

The change was included in Balearic Islands Law 12/2023, the regional budget law for 2024, approved in December 2023 and published in the Official State Gazette in January 2024.

The legislation removed provisions that had allowed money from the fund to support these policy areas. Its stated rationale was that housing and employment measures should be financed through sources other than tourism-tax revenue.

This reversed an approach used by the previous government, led by socialist president Francina Armengol, which had allocated some tourism-tax funding to public housing.

Earlier PP criticism of using the tourism tax for housing

The disagreement predates Prohens’s presidency.

In October 2022, the PP criticised the Armengol government’s allocation of tourism-tax revenue to projects it considered part of ordinary public spending, including public housing. Misericordia Sugrañes, then president of the PP in Menorca, argued that protected housing already had conventional funding routes and questioned the use of the tourism tax for that purpose.

The PP’s position was that the tax should be directed towards environmental measures and addressing the effects of tourism rather than financing what it regarded as ordinary administrative responsibilities.

That argument became part of the rationale for the subsequent legislative change under Prohens’s government.

The PP backed a return to housing funding in November 2024

The political picture had already shifted by November 2024.

On 12 November, the Balearic Parliament approved a PSOE motion calling for part of the Sustainable Tourism Tax revenue to be made available again for public protected rental housing.

The original proposal sought to reserve at least 15% of the funds for this purpose. The PP introduced an amendment that removed the mandatory percentage, and the final motion called for the funding route to be restored without setting a minimum allocation.

The motion received 48 votes in favour, five against from Vox and one abstention.

The vote did not itself amend the legislation. It was a parliamentary call for the government to restore the funding option, rather than a direct authorisation to begin allocating the money to housing.

In May 2025, the PP also voted against considering a broader PSOE legislative proposal on tourism saturation that included a change to the tourism-tax rules. Because that initiative contained other reforms, its rejection cannot be treated as a vote solely against using the tax for housing.

Prohens now proposes another legislative amendment

During the general policy debate on 20 October 2026, Prohens announced that her government would seek to amend the legislation to allow Sustainable Tourism Tax revenue to support housing policies again.

The announcement followed an earlier indication in June that the government was exploring the possibility. At that stage, Prohens described the idea as something that still needed to be examined and said a legislative change would be required.

The October announcement represents a more explicit commitment to pursue the amendment. However, the details of the new legal framework, the amount that could be allocated to housing and the timing of any future funding remain to be established.

The government has not yet restored the previous funding route through the announcement alone.

Opposition welcomes the measure but questions the reversal

The announcement drew applause from left-wing members of Parliament, while opposition parties questioned why the government was now proposing a policy it had removed.

PSIB representative Rosario Sánchez argued that the government had lost time by abandoning the approach earlier in the legislature. MÉS per Mallorca spokesperson Lluís Apesteguia also criticised the announcement as a reversal rather than a new housing policy. Més per Menorca raised similar objections.

The PP defended Prohens’s decision. Its parliamentary spokesperson, Sebastià Sagreras, argued that the previous government had used the tourism tax for projects that were not directly related to tourism, citing spending on radio events and electric scooters. He said the current housing situation justified considering an exceptional measure following proposals raised through the regional sustainability dialogue process.

The two sides therefore disagree not only over the proposed use of the revenue, but also over whether restoring it represents a necessary response to the housing crisis or an admission that the earlier policy was mistaken.

What happens next?

The next step is for the Balearic government to advance the legislative amendment required to make housing eligible for Sustainable Tourism Tax funding again. Until that change is enacted, the announcement does not create a new funding entitlement or guarantee a specific amount for public housing.

The proposal is part of a wider set of housing measures presented by Prohens during the debate, but its practical impact will depend on the final legal text, the funds allocated and the projects selected.

For now, the clearest development is a policy reversal: the government that removed housing as an eligible use of the tourism-tax fund is now seeking to restore that possibility, amid continuing political disagreement over how the Balearic Islands should address the housing crisis.