Fewer deaths and disruptions in the real estate industry. These are the two main factors that caused the Generalitat’s Valencian Tax Office (ATV) to collect 8% less in the province of Alicante than last year. Both the decline in deaths and the decline in home sales have directly impacted Inheritance and Transfer of Property taxes respectively; exactly two of them earn the highest income. There was also a decrease in the collection corresponding to the donation tax.
ATV announced to the public the accumulated collection data for the first 11 months of the year. In the province of Alicante, this figure was 954.5 million euros, compared to 1,037.1 in the same period last year..
When looking for the main reasons, we should first point out: Inheritance Tax, whose revenue decreased by 19.5 percent to 80.8 million euros. The low number of deaths has a lot to do with this decline, which has gradually decreased since it peaked due to the pandemic.
Another factor to consider is the 99% bonus approved last month for this tax by Carlos Mazón’s autonomous government. As ATV manager Sonia Díaz explained, although the measure is already in force, its retroactive effects will be from May 28, we will have to wait until the first quarter of next year to see the real effects on revenue collection. However, the head of the agency is aware of this. There may be taxpayers who use the time they are entitled to when applying for liquidation.precisely in order to benefit from this tax deduction.
The other tax where a significant decrease in collection has been recorded is the Property Transfer tax, which remains at €642 million, in this case at 9.3%.. In this case, the decline has a direct relationship with the situation in the real estate sector. The increasing costs of mortgage loans also affect the housing sales, which have fallen in recent months. Before we go any further, according to the latest known data, operations in October were down 11% compared to the same period last year. This is the global percentage, given that the decline is only one percentage point higher when second-hand home sales are taken into account, which has a direct impact on this tax.
Compared to the remaining taxes, the 5.1% decrease in donations is noteworthy and the collection remains at 6.7 million euros.
Taxes that improve
On the other side, we have Heritage, where income increased by 0.2% in taxes to 52.5 million euros; and Documented Legal Actions, 0.8% and 116.7 million. Corporate Activity Tax draws attention with its strong increase of 69%Although globally the revenue is quite small, barely 1.2 million euros. There was also an increase in all gambling-related taxes, especially by 3.6%, which brought the tax to 53.9 million.
this should be noted The decline in collections in the province of Alicante was greater than in the entire Valencian CommunityIt reached 2 billion 136 million with 3.4%.
However, Sonia Díaz wanted to underline the high percentage of collection execution at the regional level, which reached 97.5% by November. She also emphasized that: Revenues increased by 31% compared to the same period in 2019before the covid health crisis broke out.