Fewer deaths and fewer disruptions in the real estate market have driven lower revenue for the Valencian Tax Office. In the Alicante province, the ATV reported an 8% drop in total collections compared with the prior year. Revenues from inheritance taxes and property transfer taxes fell directly in line with the declines in deaths and home sales, respectively, while donations tax also experienced a downturn.
ATV released the accumulated collection figures for the first 11 months of the year. In Alicante, total collections stood at 954.5 million euros, down from 1,037.1 million euros in the same period last year.
The main drivers behind the shortfall begin with the Inheritance Tax, which declined by 19.5% to 80.8 million euros. The reduced number of deaths has a strong influence, having fallen steadily since the peaks seen during the pandemic.
A 99% deduction approved recently for this tax by the regional government led by Carlos Mazón is another factor. ATV manager Sonia Díaz explained that while the measure is already in force, its retroactive effect will start on May 28. The impact on revenue will only become visible in the first quarter of the next year. The agency head noted that taxpayers might time their liquidation requests to maximize the benefit from this deduction.
The second notable decrease is in the Property Transfer Tax, which remained at 642 million euros, representing 9.3%. This downturn mirrors conditions in the real estate market, where higher mortgage costs have dampened housing demand. October data show a 11% drop in overall transactions compared with the previous year, with second-hand sales contributing a similar trend. This pattern has a direct effect on the tax revenue from property transfers.
Donations recorded a 5.1% decline, bringing in 6.7 million euros. While not large in scale, the shift is notable within the province.
Taxes that improve
On the positive side, Heritage income rose slightly by 0.2% to 52.5 million euros. Documented Legal Actions increased by 0.8% to 116.7 million. Corporate Activity Tax drew attention with a robust 69% rise, though the absolute amount remained modest at around 1.2 million euros. Gambling-related taxes also grew, up 3.6%, pushing total gaming tax receipts to 53.9 million.
It is worth noting that the Alicante province still lagged behind the Valencian Community as a whole in collection performance, reflecting broader regional dynamics. Total Valencian revenue reached 2.136 billion euros with an overall growth of about 3.4%.
Despite the gaps, regional authorities highlighted a high rate of collection execution, reaching 97.5% by November. Officials also pointed to a notable improvement in revenues when compared to pre-pandemic levels, marking a 31% increase relative to the same period in 2019 before covid health restrictions.