Tax relief announced this Thursday by Generalitat president Carlos Mazón will benefit around 750,000 taxpayers in Alicante, with potential savings totaling 71.6 million euros. Experts expect the measures, especially those aimed at housing purchases, to positively affect residents and possibly stimulate the local economy. Yet many observers question whether such tax cuts can be sustained given the region’s ongoing debt challenges tied to the financing model for public coffers.
Forecasts from the Consell for the Valencian Community indicate that personal income tax reductions could save Alicante taxpayers about 64.8 million euros. The largest expenditure area remains health-related, particularly oral health, with 28.9 million; followed by subsidies for glasses and contact lenses at 22.8 million. Deductions for sports activities total 9.2 million, mental health aid 3.1 million, and support for brain injuries or Alzheimer’s is 685,000 euros, with 88,000 euros earmarked for rare diseases.
Real estate transfer tax measures will save citizens about 6.8 million. The standout item is a discounted rate on the purchase of a habitual residence for young buyers under 35, amounting to 5.2 million. Officially protected housing purchases under the general regime sit at 881,000 euros, while purchases under the special regime and for large or single-parent families, disabled individuals, and women who have faced gender-based violence remain at 674,000 euros.
What do experts think about these measures? Alfredo Masó, professor of Fundamentals of Economic Analysis at the University of Alicante, notes that the cuts could be helpful for families navigating a difficult period. He also highlights that a significant amount, around 199 million, will not be collected, but emphasizes that discounts should be viewed as temporary given the delicate state of the region’s finances.
José María Gómez Gras, professor of Business Organization at the Miguel Hernández University in Elche, argues that housing access measures are highly appropriate. He adds that any action should be backed by careful calculations showing feasibility.
Antonio Pérez, head of the financial commission at the Alicante College of Economists, shares the view that rate reductions help young people gain independence, while suggesting that other supporting mechanisms may be needed to sustain mobility in housing and related purchases such as furniture.
Ignacio Jiménez Raneda, former UA chancellor and professor emeritus of Fundamentals of Economic Analysis, offers a more cautious stance. He points out that loss of income poses a challenge for an underfunded, highly indebted community like Valencia, but he also notes that outcomes ultimately depend on political choices. He warns that lowering taxes while shrinking the public good is a tricky balance to strike.
Reduction in Inheritance Tax accompanies streamlined processing of estates in Alicante
Paloma Taltavull, professor of Applied Economic Analysis at UA, expresses skepticism about broad housing tax breaks. She suggests that large cities may not benefit as much due to limited access to affordable apartments and predicts only modest yield from personal income tax cuts.
Finally, Luis Chinchilla, president of the Professional Association of Tax Consultants of the Valencian Community, says that while the timing is debatable, prudent steps could be valuable given the accounts’ current state.