The general council approved a draft law that updates Law 13/1997, which governs how Personal Income Tax and related taxes are divided within the territory. The changes strengthen and expand incentives for taxed family transactions, especially those connected to inheritance and donations.
The measure creates a 99% bonus of the tax quota for qualifying inheritance and life insurance benefits. It extends the existing rules of Inheritance and Donation Tax Law No. 29/1987 for hereditary properties I and II. The beneficiaries include close relatives of the deceased, such as grandchildren and adopted children, spouses, descendants, and adopters.
In addition, similar relief applies to transactions in favor of a spouse, parents, adopters, children, or through donations or other lucratives by the donor. It also covers grandchildren and great-grandchildren who are or become adopters for these purposes, and it simplifes how related reductions are handled by recognizing the donor’s spouse as a beneficiary.
Consell opens with 99% discount on Inheritance and Donation Tax
The same bonus applies to acquisitions by individuals with physical or sensory disabilities of 65% or more, or those with intellectual disabilities of 33% or more.
This measure covers taxable events that occurred since May 28, 2023, and is consistent with constitutional principles of non-retroactivity and legality, since it provides a more favorable framework for most taxpayers and strengthens legal certainty.
Officials also urge urgent processing of the bill so taxpayers can benefit from the relief promptly without increasing tax administration costs.
discounts
Various reductions will influence the calculation of the Inheritance and Donation Tax base in transfers between individuals when specific circumstances apply in the Valencian Community.
Specifically, when purchases are made by sons or daughters or adopted persons under 21, a rebate is available: 100,000 euros plus 8,000 euros for each year under 21, with a maximum possible rebate of 156,000 euros.
If those acquisitions involve sons, daughters, or adopted persons aged 21 or older, spouses, parents, or adopters, a 100,000 euro discount applies. For grandchildren or great-grandchildren aged 21 or older, a 100,000 euro discount is available; for those under 21, the discount is 100,000 euros plus 8,000 euros for each year under 21. Discounts for company purchases may exceed 156,000 euros, with a 100,000 euro baseline for grandparents and similar relatives.
For individuals with physical or sensory disabilities, a disability level of 65% or more in mental or 33% or more in other areas triggers a deduction of 240,000 euros from the tax base.
Additionally, a 120,000 euro deduction applies to donors who are physically or sensorially disabled and who are spouses, parents, adopters, children, or adoptees of the donor, including the same disability levels for grandchildren or great-grandchildren and their grandparents.
Historically, in the Valencian Community, these measures had limited impact on most residents, with 99% quota reductions applying narrowly to descendants, spouses, and relatives of the deceased.
Economic crisis
During the toughest years of the crisis, the premium rate was lowered to 75 percent. Since 2017, the aim has been to balance tax collection with available reliefs, prioritizing measures that ease the burden on families while still collecting revenue.
Today, the bonus in the Valencian Community generally sits at 50 percent. Still, certain groups such as those under 21 or individuals with significant physical, sensory, or mental disabilities can reach up to 75 percent.
There is ongoing discussion about the broader impact of inheritance taxes on behavior, including saving and investment, and about whether the tax serves as a transfer mechanism of assets and income. Taxpayers with prior obligations may feel the effects more strongly in difficult times, particularly around bereavement where fees and funeral costs add to the financial strain.
In many cases, the inheritance tax can place a serious financial burden on families who do not receive a direct economic benefit from the inheritance. In the end, the overall effect on public revenue remains modest relative to total tax income; inheritance tax accounts for about 1% of the Generalitat budget, while donation tax contributes around 0.1% of public revenue. There is no separate broadened bonus in the Valencians’ tax quota in general.