• Hacienda Mazón announces as the first measure of its Consell the "urgent" suppression of the Inheritance and Donations Tax

The Valencian president, the popular Carlos Mazón, pulled symbolism at the first meeting of the plenary session of the Consell in July to announce an almost total bonus of the Inheritance and Donations tax. The message was clear: quickly fulfill one of the great promises in the electoral campaign. The second blow of effect has been revealed this Thursday, when announcing a package of tax cuts that focus on young people and access to housing and low incomes. Quite a declaration of intent in the face of criticism from the left who accused the new PP and Vox government of encouraging a tax reduction for the upper classes.

Together with the Minister of Finance, Ruth Merino, Mazón has advanced in an appearance at the Palau de la Generalitat a whole series of measures that seek the "relief of the fiscal pressure" of Valencian families. The first set of measures, with retroactive effect from January 1, 2023, are six tax deductions for individual income of up to 32,000 euros and joint income of up to 48,000. "They are the lowest bands of the IRPF scale," stressed the head of the Consell, who has estimated that the "potential beneficiaries" will amount to 2.1 million citizens, that is, 87.5% of the declarants.

Specifically, the Consell proposes a deduction of 30% of expenses (up to 150 euros) linked to oral health; another 30% of the expenses (up to 100 euros) for the purchase of prescription lenses and contact lenses; a deduction of up to 150 euros for 30% of the expenses generated by members of the family unit who need help for mental health pathologies; deduction of up to 100 euros for expenses generated by members of the family unit with rare diseases; deduction of up to 100 euros for expenses generated by members of the family unit with a diagnosis of acquired brain damage or Alzheimer's (up to 150 euros if the family is large or single-parent); and deduction of 30% (up to 150 euros) for expenses associated with sports, such as the gym fee or federation cards.

Secondly, the Consell proposes a "policy of incentive of the housing market", which basically focuses on young people up to 35 years old. In this sense, deductions are proposed in the Property Transfer Tax, with a super-reduced rate of 6% (currently it is 8%) for the acquisition of a habitual residence of up to 180,000 euros for children under 35 years of age. The calculations of the Consell contemplate that up to 15,000 young people could benefit from this measure.

In addition, there will be a super-reduced rate of 6% for habitual residence of official protection of general regime up to 180,000 euros, to which any person can benefit. It also establishes a super-reduced rate of 3% for the purchase of habitual residence of official protection of special regime of up to 180,000 euros and for the purchase of housing for large families, people with disabilities and women victims of gender violence.

In total, the "projection" of the Consell speaks of a total impact of 199 million euros that, "added to the 166 million of Inheritances and Donations, offer a figure of 365 million of savings for Valencians". Only in deductions, the Treasury estimates a saving of 180 million euros.

However, Mazón has admitted that the deflatation of the IRPF rate that the PP insistently asked the Government in full escalation of prices can not yet be undertaken. "We need to have data from the Government of Spain, some more studies," said Mazón, who pointed out that "it is not ruled out but remains an objective."

Moreover, he has insisted that the tax reform does not end here, but will be "continuous" depending on the economic context. In this sense, the Consell has an economic growth of 2024-3.3% by 5, which it hopes to offset this tax reduction with an increase in VAT collection. Even so, he demanded from the Ministry of Finance figures on income on account that the autonomous communities must have to make their budgets. "That the Government of Spain instead of negotiating under the table gives us figures," he lamented.

  • Personal Income Tax
  • PP
  • Government of Spain
  • Taxation
  • Carlos Mazón