On May 31, 2025, Law 5/2025 of May 30, on fiscal, administrative, and financial management measures, and the organization of the Generalitat (Valencia, Castellón and Alicante), was published, introducing significant changes to taxes.

The main changes are:

1. Wealth Tax

Effective from December 31, 2025, inclusive, the tax-free threshold is increased to €1,000,000 (previously €500,000).

2. Property Transfer Tax and Stamp Duty

Effective for taxable events occurring from June 1, 2026, inclusive, the general rate for the onerous property transfer tax (TPO) on the sale of real estate and real rights will be reduced from 10% to 9%.

A new 4% Transfer Tax (TPO) rate is introduced for the acquisition of non-urbanizable rural plots that meet the legal requirements to be considered plots with agricultural potential, by professional farmers registered with the Special Regime for Self-Employed Workers (RETA), and subject to certain requirements, including the maintenance of the agricultural or complementary activity for the five years following the acquisition.

With effect for taxable events occurring from June 1, 2026, inclusive, the general rate of Stamp Duty (AJD) will be reduced from 1.5% to 1.4%.
A 50% reduction in Stamp Duty (AJD) is introduced for notarial deeds related to the acquisition, consolidation, aggregation, segregation, or division of real estate, provided that the investment initiative has been declared a project of regional interest or a similar designation that acknowledges its strategic territorial nature.

3. Inheritance and Gift Tax

A regional bonification is established on the portion of the tax liability corresponding to the declared assets and rights, for inter vivos and mortis causa acquisitions by second-degree (e.g., siblings) and third-degree (e.g., uncle) collateral relatives belonging to kinship group III (now we only had bonifications for first-degree).
This amendment will come into effect progressively:

  • For taxable events occurring from June 1, 2026: 25%.

  • For taxable events occurring from June 1, 2027: 50%.

4. Personal Income Tax

Tax benefits aimed at strengthening the promotion of policies that support birth rates, adoption, and foster care in all its forms are improved.

Along with these changes, various technical improvements are made to other Personal Income Tax incentives, and the regulations governing donation deductions are adapted to the recent modifications in state incentives related to patronage. The deductibility of healthcare expenses related to the purchase of prescription eyeglass frames is also clarified.