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- 08/09/2023
- Tax aspects
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The recent complete and definitive abolition of the regional Inheritance and Gift Tax in the Valencian Community
The Valencian Community has taken a significant step regarding the Inheritance and Gift Tax. Following the first plenary session of the new government led by the Popular Party (PP) and Vox in the region, it has been urgently agreed to process a 99% discount on both regional taxes that apply to inheritances and gifts, applicable to ascendants, descendants, and spouses.
The President of the regional government, Carlos Mazón, made this announcement after the Consell meeting in Alicante. This decision represents the new administration’s first political action and aims to effectively eliminate the Inheritance and Gift Tax in the Valencian Community. The measure is retroactive from May 28, 2023, the date of the regional elections.
Until the date of this decision, the Inheritance Tax was generally subject to a 50% discount, with some exceptions for young children or people with disabilities. According to Mazón, the maximum discount will apply in cases where the succession or donation benefits sons and daughters, spouses, parents, and mothers. The president argued that this tax represented a significant economic burden for many families, as they had to pay it even when the inheritance did not result in any real economic benefit or an increase in their assets.
Mazón also pointed out that over 20,000 people chose to decline inheritances in the Valencian Community in 2022, a trend that continued to rise, with a 24% increase in the first quarter of the current year. Additionally, he noted that its impact on the regional budget was limited, representing only 1% of the total public revenue, with around 400 million euros collected in 2022 in the region, 352 million from Inheritance Tax and 40 million from Gifts Tax.
This measure comes after the new head of Consell already took steps to streamline the structure of the regional government, reducing the number of secretariats and undersecretariats from 55 to 46. Mazón emphasized that “political” savings and reducing bureaucracy were priorities of his government, and he anticipated that more measures in this direction could be expected in future Consells.
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