In May 2025, the right-wing formation of PP and Vox which governs in the eastern Spanish region of Valencia passed far-reaching fiscal legislation which affects locals and foreign residents.
It involves changes to wealth tax, inheritance and gift tax, property transfer tax and personal income tax.
The amendment will come into force when it passes through the plenary session and is published in the Diari Oficial de la Generalitat (DOGV).
This means it will be applicable for the 2025 tax return, which will be filed in spring 2026, at the same time as the Income Tax return known as the declaración de Renta.
Wealth tax
This year approximately 10,000 Valencian taxpayers, out of the 28,000 currently required to pay Wealth Tax, will not have to do so, due to the amendment which raises the exempt minimum from €500,000 to €1 million.
The reform also means that those with assets exceeding the €1 million threshold — excluding their primary residence, will see their tax base reduced by €500,000, effectively paying much less.
According to the latest data from the Tax Agency for the 2022 fiscal year, 26,905 people in the region of Valencia paid Wealth Tax that year.
This added up to a total of €186 million. Of the nearly 27,000 taxpayers in 2022, a total of 9,839 had assets, excluding their primary residence, which were between half a million and €1 million. With the new rule, it means that they will all be exempt from paying this tax.
READ ALSO: Everything you need to know about Spain's wealth tax
Inheritance and Gift Tax
The rules have changed with regards to inheritance and gift tax among those in kinship group III. This includes second and third-degree relatives (first cousin, nice, nephew, great-grandparent, great-aunt etc) as well as ascendants (parents, grandparents) and descendants by affinity. This also includes siblings.
This amendment will come into effect progressively.
For taxable gifts or inheritance given on or after June 1st, 2026: 25 percent.
For taxable gifts or inheritance given on or after June 1st 2027: 50 percent.
Property Transfer Tax and Stamp Duty or Documented Legal Acts Tax
With effect from June 1st, 2026, the general rate for property transfers on the purchase and sale of real estate and property rights will be reduced from 10 to 9 percent.
A new property transfer rate of 4 percent is also being introduced for the acquisition of rural plots that meet the legal requirements to be considered agricultural land by professional registered farmers.
With effect from June 1st, 2026, the general rate for stamp duty or documented legal acts tax (AJD) will be reduced from 1.5 to 1.4 percent.
A 50 percent discount on the AJD is introduced for notarial public deeds related to the acquisition, grouping, aggregation, segregation, or division of real estate, provided that the investment initiative has been declared a project of regional interest.
Personal income tax
Tax benefits are being improved to strengthen policies that support birth, adoption, and foster care.
In addition to these changes, various technical improvements are being made to other personal income tax incentives. These include the regulation of deductions for donations and the deductibility of healthcare expenses such as purchase of prescription glasses.
There will also be further deductions for donations for ecological purposes or donations intended for Valencian cultural heritage or the promotion of Valencian language. This will be a deduction of 20 percent for the first €250 and 25 percent for the remaining amount.
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