Tramuntana as a Source of Income: How Deià, Fornalutx and Other Villages Are Changing the Island

Mountain Villages Leading: A Surprise in the Income Tax Data

The newly analyzed income tax data paint a picture that will surprise many: not Palma, but small towns in the Serra de Tramuntana top the list of highest shares of income from self-employment, rentals and private businesses. Deià leads the way with almost 40 percent. Artists, holiday rental hosts, lawyers and property owners shape the village scene. In the mornings on the plaça locals mix with residents and long-stay visitors, the espresso clatters, the church bell rings – and one wonders: what does this wealth mean for everyday life and community?

Behind the Numbers: Who Earns What and Why That Can Be Misleading

The percentages hide a colorful mix: long-term and short-term rentals, small galleries, craft studios, boutique hotels, but also real estate deals. Fornalutx and Valldemossa follow closely with around 36 percent. Even places like Sóller or Escorca show high self-employment rates. That sounds like economic strength – but the statistics say little about the stability of these incomes. Many business models rely on tourism; the weeks of the year with profit are often limited.

Seasonality, Infrastructure and the Hidden Costs

In summer the MA-10 already grinds under tourist traffic early, cypresses cast long shadows, olive trees line the hairpin turns. Yet in winter there is silence. Seasonality makes accounting difficult for local entrepreneurs and affects employees with temporary jobs. Short-term rentals bring money, but they reduce the supply of permanent housing. Young families or workers can hardly find homes. The result: rents and purchase prices rise, and locals often move to peripheral areas.

What Public Debates Often Overlook

While attention usually focuses on the beaches and Palma, displacement often begins in the narrow streets of the mountain villages. Bakers, craftsmen and small grocery shops complain about higher rents and a lack of customers outside the season. Less well known is the strain on local infrastructure: water shortages in hot summers, rising amounts of waste in holiday months, parking pressure and traffic management are daily challenges for small town halls. At the same time, long-term investments bring higher tax revenues and a richer cultural offer – so it is not simply black and white.

Concrete Local Problems

• Affordable housing: Young families and seasonal workers find hardly any offers in sought-after villages.

• Regulatory pressure: Holiday rentals create income but also legal uncertainty and speculation.

• Seasonality: Business models are often only profitable for a few months.

• Infrastructure costs: Water, waste and public spaces become more expensive when user numbers explode in summer.

Practical Solutions — and What They Could Achieve

The good news: there are practical approaches that consider both locals and entrepreneurs. Some measures that could help municipalities like Deià, Fornalutx or Valldemossa include:

• Local housing quotas: A share of newly created housing is permanently reserved for locals – through rent controls or cooperative models. This protects young families from displacement.

• Clear rules for holiday rentals: Transparency around licenses, caps per municipality and restrictions in the low season can curb speculation and provide legal certainty.

• Temporary infrastructure levies: Use-specific fees in peak season months finance water, waste disposal and traffic measures without cutting basic services.

• Support for year-round offerings: Tax incentives for businesses that create year-round jobs – e.g. food processing, workshops or educational offers for long-stay visitors.

• Support for local trades: Affordable commercial spaces, pop-up solutions for bakers and craftsmen, and training in digital marketing – so local actors are not overrun by external investors.

Looking Ahead: Between Investment and Everyday Life

The economic independence of many island towns is not a catastrophe per se. Cultural diversity, new forms of work and a lively range of services enrich daily life. But without regulatory measures social diversity risks eroding. The small cafeteria at 10 a.m. may soon be reserved only for long-stay guests if young parents and craftsmen can no longer find spaces.

When I drive along the MA-10 I see more than numbers: peeling facades next to new villas with sea views, cypresses, dogs barking on the plaça, and young families pushing shopping carts up the steps. The central question remains: do we want an island that is mainly attractive to investments, or one that also remains livable for those who grew up here? The answer requires courage in planning, clear rules and the will to combine tradition with economic modernity.

In the end it is a local decision. On the squares of Deià, between the scent of freshly baked ensaimadas and the wind of the Tramuntana, it is made every day.