Alicante Tax Revenue Trends and Public Finance Impact (ATV)

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Alicante’s Tax Revenue Highlights Between 2020 and 2022

The real estate market has been a bright spot for public administrations in the Valencian Community, with a notable contribution from the Generalitat through two key taxes: Inheritance Transfer Tax and Documented Legal Transactions Tax. These taxes apply to every property purchase and sale, and their strength is reflected in the Valencian Tax Office’s performance in Alicante. The revenue surge over the last two years has drawn attention to the area’s growth and its impact on public finances, as reported by the ATV manager Sonia Diaz.

In the 2022 financial year, tax collection for all concepts reached 1.176 billion euros, marking a 30.9 percent increase from the previous year. The uptick was especially pronounced in the District Administration, where the total more than doubled compared to 2020, reaching 612 million euros. Diaz notes that this rise translates into more resources for the Generalitat to fund public services, while also benefiting citizens who participate in the real estate market boom.

Photographs show ATV Director Sonia Díaz with a government minister as a reminder of the close ties between tax policy and public finance. The district manager also stresses that much of the growth is driven by real estate activities and the ongoing recovery from the pandemic. The Property Transfer Tax, largely paid through transactions involving existing homes, alongside the Documented Legal Transaction Tax, also influence new construction activity in the region.

During the 2020 to 2022 period, the volume of tax collections from home sales rose from 378 million in 2020 to over 577 million in 2021, and then surpassed 807 million in 2022. Revenues from AJD rose from 95 million two years earlier to 132 million in 2022, reflecting continued demand in the housing market and formal property dealings.

The state of Alicante showed a strong performance, with a reported increase of 759 million euros in revenue paid to the Treasury compared with the previous year. The news, according to Díaz, is encouraging for the moment, as market dynamism persists and forecasts for the year ahead remain optimistic, even if large upward adjustments are not anticipated.

It is worth noting that most other Generalitat tax collections also advanced over the past year, with exceptions being donations and corporate activity, which saw declines of 29.7 percent and 5.2 percent respectively. On the other hand, income from wealth taxes rose to 54.1 million euros, up 23.9 percent, and other key revenue streams added a further 12.9 percent, reaching 116.6 million. The so-called game taxes also posted solid gains, totaling 55.9 million euros and rising 36.2 percent according to the same sources.

Facilitating taxpayer compliance remains a primary focus for the Valencia Tax Office. The agency aims to streamline the payment process by improving access to tax information and simplifying steps for taxpayers when filing drafts and conducting payments. Although progress is evident, officials acknowledge that the regional body still has work to do before reaching the efficiency seen in some other tax administrations.

As the administration looks ahead, the emphasis is on making tax information more accessible and payments easier for residents and businesses. By enhancing digital services and clarifying procedures, the ATV intends to support timely compliance while maintaining robust revenue streams that fund essential public services in the Valencian Community.

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