Tax relief remains a cornerstone of the agenda for the new autonomous PP and Vox government, which soon led the Generalitat. It has already launched several measures in this area. Yet, as municipalities themselves acknowledge in the draft budgets, this path is not the one chosen by many large towns or by other right-leaning administrations. Elche stands out as an exception in the province, while Orihuela, Benidorm, Alcoy, Dénia and Santa Pola still plan to raise rates or taxes, and Alicante, Torrevieja, San Vicente del Raspeig and Elda plan to keep them steady. The rationale given is that funding rising service costs for residents requires these fiscal policies.
The tax relief plan championed by the Consell has not won broad support among city councils. In Alicante province, seven out of ten municipalities are led by parties on the right.
The anomaly that confirms the trend is Elche, where the political shift in the latest elections came through a pact between the People’s Party and Vox, leaving the PSPV and Compromís without control. Perhaps that background explains why the new administration, led by Pablo Ruz, aims to make a visible impact with a gradual tax reduction, the first step coming next year. The targeted reductions include 1% in the Property Tax (IBI), the Vehicle Tax (IVTM), the Economic Activities Tax (IAE) and the Construction, Installations and Construction Tax (ICIO). Meanwhile, as in many cities, tow truck charges and the reactivation of charges for occupying public roads — suspended during Covid — are expected to recover. Treasury Undersecretary Francisco Soler argues that the reductions aim to spur economic activity and ensure social services remain uninterrupted, with the commitment that the social safety net will stay protected.
In Alicante itself, where the PP governs with a simple majority under Mayor Luis Barcala, the budget process is designed to be approved on time for the first time since 2015. The draft has been extended from 2022. Treasury Undersecretary Antonio Gallego explains that the plan is to present the draft to different groups within October so it can be approved in November. Financial measures include a 3.25% cut to the ICIO to foster construction, while rate adjustments and several legislative changes are being considered. Regarding remaining taxes, the objective is to keep them stable while tweaking articles for clarity. Gallego stresses that these steps will not harm service provision and that population growth could offset tax collection changes.
Treasury technicians oppose further tax cuts in Alicante
In Torrevieja, where the PP mayor Eduardo Dolón was re-elected, efforts are under way to ensure the budgets come into force on January 1. Treasury Undersecretary Domingo Paredes notes that the council plans to freeze rates and taxes after last year’s cut and emphasizes that the IBI will follow the legal minimum value. After a four-year pause due to the pandemic, the recovery of public road occupancy fees is expected to bring in nearly two million euros annually.
San Vicente del Raspeig also maintains its fees and charges under a governance coalition led by the PP and Vox, with the mayor stating that the freezing policy should guide tax decisions. He notes that these resources are needed to fund new projects and services and to address rising costs for essential improvements such as cleaning and waste collection.
new contracts
Benidorm plans higher taxes and fees. Under Mayor Toni Pérez, who also took the helm of the Provincial Council, the city faces a 27.5 million euro deficit tied to rising contract costs for 2024. This includes increased salaries for municipal staff, as well as higher costs for waste collection, lighting, and park maintenance. Municipal sources suggest a further rise in the IBI, though they deny that it will reach 73% as some economic analyses warned. An increase in the garbage rate is also anticipated, potentially between 30 and 40 percent, and adjustments to road occupancy policies are expected to accompany higher activity on outdoor seating.
In Orihuela, where the PP and Vox govern in coalition and Pepe Vegara leads, budgets have been extended since 2018, and the aim is to restore normal budgeting. Differences within the former PP-Cs alliance and later disputes with the “oranges” (Cs) party delayed updates, but the current plan is to start the year with new accounts. The municipal economic department notes that the fiscal agenda is not fully settled yet, but initial plans indicate an increase in the garbage rate due to the new national tax on landfill waste. An IBI rise is also being considered, with a history of four years without updates due to budget shortfalls.
The Santa Pola City Council, led by Mayor Loreto Serrano, will review the garbage rate to better match service costs. Treasury undersecretary José Pedro Martínez stresses that other rates will be adjusted to avoid deficits, while the circulation tax and IBI should remain unchanged, the latter at a low level.
left governments
What about councils led by left-leaning coalitions? The plan seems to align with their broader view that taxes fund essential public services. Alcoy, under socialist Toni Francés in coalition with Compromís, plans moderate increases in public rates and prices. Treasury Undersecretary Vanessa Moltó notes that while several years of freezes occurred during the pandemic, a deficit has accumulated and tax adjustments are needed to keep services running. Overall, tax levels are expected to remain broadly stable.
In Dénia, led by socialist Vicent Grimalt and also governed with Compromís, increases are anticipated as well. Treasury chief Paco Roselló explains that IBI would rise by about 10% to address revenue declines from lower capital gains, fees, the waste tax, and new city bus services; other revenue lines remain largely unchanged.
Finally, in Elda, where socialist mayor Rubén Alfaro leads with support from Elda for All, the full fiscal plan for the next year is still being shaped, as technical assessments continue. Finance Councilor Fernando Gómez says the aim is not to impose more taxes on residents and to preserve the current tax base as a first priority.
Uncertainty over the spending rule and transfers
Drafting a balanced municipal budget becomes trickier when revenue details or rules are unclear. Many councils are waiting for guidance from the national level on transfers and whether the spending rule will apply. The practice, paused during the pandemic, is slated to resume next year. Given that tax transfers typically rise year over year, many municipalities plan budgets based on last year’s revenues, assuming the spending rule will be reimposed. Reserves are also used to cover possible deviations from initial estimates.