Improving the thermal insulation of a dwelling in Menorca is one of the investments with the best return: it reduces the electricity bill by between 20 and 35%, improves the home's comfort in summer and winter, and can increase the property's value by between 5 and 15% by improving its energy rating.
What many owners do not know is that a good part of this investment can be recovered through grants, tax deductions and aid programmes that are active in 2026. This guide compiles all the available financing channels for thermal insulation works in the Balearic Islands. If you want to know how these improvements affect your home's rating, read our guide on how to improve the energy certificate in Maó. And if you have a villa in the Ciutadella area, you will be interested in our specific guide to thermal insulation for villas in Ciutadella.
To learn about the thermal insulation systems we install, visit our page on thermal insulation with plasterboard in Menorca.
1. Income Tax (IRPF) Deductions for Energy Efficiency Improvements
Law 10/2022 and its extensions establish three types of income tax deduction for works to improve energy efficiency in dwellings:
20% deduction — Reduction of heating and cooling demand
Applies when the work reduces the heating and cooling demand of the dwelling by at least 7%. A plasterboard wall lining with thermal insulation on the facade generally meets this requirement.
The maximum deduction base is €5,000 per tax return, with a maximum deduction of €1,000. To access it, you need an energy efficiency certificate before and after the work.
40% deduction — Reduction of non-renewable primary energy consumption
Applies when the work reduces non-renewable primary energy consumption by at least 30%, or improves the property's energy rating to letters A or B.
The maximum deduction base is €7,500 per tax return, with a maximum deduction of €3,000. It also requires an energy efficiency certificate before and after the work.
60% deduction — Energy rehabilitation of buildings
Applies when the works affect the residential building as a whole (community of owners) and a reduction of at least 30% in non-renewable primary energy consumption is achieved, or rating A or B is reached.
The maximum deduction base is €5,000 per tax return, accumulable over up to 4 tax years with a total maximum of €15,000. The maximum deduction reaches €3,000 per year, up to a total of €9,000.
How it works in practice
If you carry out a plasterboard wall lining with thermal insulation on the facade of your home for €3,000 and manage to reduce heating/cooling demand by 7% or more:
- You obtain an energy efficiency certificate before the work
- You carry out the work with an itemised invoice
- You obtain an energy efficiency certificate after the work
- You apply the 20% deduction in your income tax return
- You recover €600 via income tax
If the improvement is greater (30% reduction in primary energy), the deduction rises to 40%, that is, €1,200 of tax return for a €3,000 work.
2. Govern Balear Programmes — Next Generation EU Funds
The Govern de les Illes Balears manages energy rehabilitation programmes for dwellings financed with European funds from the Recovery, Transformation and Resilience Plan (Next Generation EU funds).
Dwelling rehabilitation programme
These programmes cover between 40 and 80% of the cost of energy improvement works, with maximum caps per dwelling. The amounts and application deadlines vary according to the call, as they are published periodically in the BOIB (Butlletí Oficial de les Illes Balears).
Usual requirements include that the dwelling must be pre-2007, that an improvement of at least one letter in the energy rating must be accredited, that the work is carried out by a registered company, and that an invoice, proof of payment and energy efficiency certificate before and after the intervention must be submitted.
How to check active calls
The calls are published on the Govern Balear website (caib.es) and on the housing portal of IBAVI (Institut Balear de l'Habitatge). We recommend consulting them periodically or asking your installer, as application deadlines are usually limited.
3. Municipal IBI Bonuses
Some Menorcan town halls apply bonuses on the Property Tax (IBI) to dwellings that accredit improvements in their energy efficiency.
The typical bonus ranges between 20 and 50% of the IBI for 3 to 5 consecutive years after accrediting the improvement. Not all municipalities apply it, nor with the same percentages.
Among the Menorcan municipalities that have offered IBI bonuses for energy efficiency are Maó, Ciutadella, Ferreries, Alaior and Es Mercadal, among others. We recommend consulting directly with the corresponding town hall to confirm the current validity and requirements.
4. Plasterboard Insulation as a Subsidisable Investment
Plasterboard wall linings with thermal insulation (mineral wool, extruded polystyrene or sprayed polyurethane foam) are one of the most common interventions to improve the thermal insulation of a dwelling in Menorca, and are fully subsidisable through all the channels described.
Types of intervention with plasterboard that improve energy efficiency:
The facade wall lining is the most effective intervention. It consists of attaching a second plasterboard wall to the existing facade, creating a cavity that is filled with thermal insulation. It reduces heat losses in winter and heat gains in summer, with a typical cost of €35-€48/m².
The party wall lining follows the same principle but is applied to walls that face unheated dwellings, garages or light wells. It has less impact than the facade but contributes to the overall improvement of the thermal envelope.
The false ceiling with insulation is the recommended solution when the dwelling has a terrace or roof above it. A plasterboard false ceiling with mineral wool significantly reduces losses through the roof, with a typical cost of €35-€50/m².
For more information about the thermal insulation systems we install, visit our page on thermal insulation in Menorca.
Real Case: Flat in the Historic Centre (Maó)
Building from 1975, single-leaf brick facade without air cavity. 80 m² dwelling with westerly orientation, energy rating F.
Before the renovation:
- Facade thermal transmittance: U = 1.2 W/m²K
- Air conditioning bill in summer: €180/month
- Heating bill in winter: €120/month
- Energy rating: F
After the renovation (plasterboard wall lining with 60 mm EPS):
- Thermal transmittance: U = 0.32 W/m²K (comfortably meets the CTE-HE for zone B3)
- Air conditioning bill in summer: €110/month
- Heating bill in winter: €75/month
- Energy rating: C
Numbers of the investment:
- Total investment: €4,800 (80 m² × €60/m², including facade wall lining and false ceiling with insulation)
- Estimated annual saving: ~€420 in cooling + ~€195 in heating = €615/year
- Amortisation without grant: 7.8 years
- With 40% income tax deduction (€1,920 recovered): real cost €2,880 → amortisation 4.7 years
- With 40% income tax deduction + 40% Govern Balear grant: real cost €960 → amortisation 1.6 years
This case shows that, with the available aid, thermal insulation can be amortised in less than 2 years.
Quick Calculator: How Much Would It Really Cost You?
To get a quick idea of the real cost of your work after applying the available aid:
Step 1: Calculate the cost of the work. For a plasterboard wall lining with insulation, estimate between €35 and €60/m² depending on the type of insulation and complexity. An average home in Menorca (60-80 m² of facade to be treated) usually costs between €2,100 and €4,800.
Step 2: Apply the income tax deduction. If the improvement reduces energy demand by 7% or more (the usual with wall lining), apply 20%. If it reduces primary energy consumption by 30% or more, apply 40%.
Step 3: If you access a Govern Balear programme, subtract between 40 and 80% of the remaining cost.
Example for a 60 m² flat with wall lining at €45/m²:
- Cost of the work: €2,700
- 40% income tax deduction: -€1,080 → Partial cost: €1,620
- 40% Govern grant: -€1,080 → Real cost: €540
For an exact quote tailored to your home, request your free quote.
Practical Example: Total Saving in an 80 m² Flat
Suppose an 80 m² flat in Maó with energy rating E that improves to C after installing a plasterboard wall lining on the facades and a false ceiling with insulation:
The facade wall lining (30 m²) amounts to approximately €1,050 and the false ceiling with insulation (40 m²) another €1,400, which adds up to a total work cost of approximately €2,450. Applying the 40% income tax deduction (for reducing primary energy consumption by more than 30%), €980 is recovered, leaving the net cost at approximately €1,524. With an annual saving in electricity of approximately €450 (25% of an average bill of €1,800/year), the investment is amortised in approximately 3.4 years.
If, in addition, a Govern Balear programme is accessed that covers 40% of the cost, the net investment is reduced to approximately €508 and amortisation to just over one year.
Requirements to Access the Grants
For your insulation work to be subsidisable, you must meet these general requirements:
You need a valid prior energy efficiency certificate (maximum 10 years) registered with IBAVI, together with a detailed quote with a breakdown of materials and labour. The work must be carried out by a professional company with an invoice, tax registration and civil liability insurance. After the work, a new energy efficiency certificate is required to accredit the actual improvement. All payments must be justified by bank transfer or card, as cash is not accepted for amounts exceeding €1,000.
Next Step
If you are thinking of improving the thermal insulation of your home in Menorca, the first step is an on-site visit where we evaluate the current state of the property, propose the most suitable solution and advise you on the grants you can access.
Request your free quote or call us on 627 829 723.
