Today, Ximo Puig, head of the Generalitat, announced a reform in Valencia’s tax policy designed to benefit residents across the community. The measure targets individuals earning less than 60,000 euros and aims to touch roughly 1.3 million people living in the Valencian Community. The following bullets summarize the core elements of the reform and what they could mean for taxpayers.
The Generalitat Valenciana presents an autonomous adjustment to the personal income tax, intended to offset the effects of inflation on middle and working-class households. Three simultaneous steps form the backbone of this effort:
1. A 10 percent increase in the Personal and Family Minimum for all IRPF taxpayers. This adjustment raises the floor for tax relief and reduces what households owe at income levels that are most vulnerable to rising prices. As a result, the new minimum thresholds are adjusted as follows:
• General cases: from €5,550 to €6,105
• Individuals aged over 65: from €6,700 to €7,370
• Individuals aged over 75: from €8,100 to €8,910
Additionally, the minimum allowances for grandchildren and people with disabilities receive a +10% uplift, further supporting families with dependents and individuals facing special circumstances.
2. Introduction of a new IRPF rate connected to the General Taxable Base. The reform preserves the rate and the personal and family minimum for taxable bases above €60,000, while reducing the liquid income for those earning up to €60,000. This change is designed to increase progressivity and redistribute personal income tax more fairly, taking into account the different sizes of households and their ability to contribute. The intention is to shrink some of the most inequitable subdivisions in the tax schedule and widen the reach of relief for lower and middle-income earners.
3. Higher and wider regional deductions. All deductions that already carry fixed amounts will rise by 10 percent. For deductions subject to maximum limits, the increases will also be 10 percent of those limits. In practical terms, this means greater scope for families and individuals to claim deductions on things like housing, dependents, and other qualified expenses. The Valencia government also tightened access rules by updating income thresholds so more residents can qualify for these deductions, making the reform relevant to a broader segment of taxpayers.
These changes respond to the needs of local taxpayers and aim to cushion middle-income households from persistent inflation. Calculations discussed by Valencia’s authorities indicate meaningful relief across various income bands and scenarios. For example, within a 10,000 euro annual income, the reform could lower the total tax burden by roughly 21 percent in certain configurations; other bands show smaller but still noticeable reductions. The reform scales gradually, with slightly lower relief at higher incomes but still offering net benefits for those under the €60,000 mark. These examples illustrate the approach of targeting relief where it is most impactful for family budgets and everyday expenses. The analysis of the reform’s impact is by the Generalitat, and the figures reflect typical cases in the Valencian Community (citation: Generalitat Valenciana, 2024).
The reform announcement highlights that the intention is not to disrupt the overall tax framework but to make it friendlier to middle-income earners who have seen their purchasing power eroded by inflation. By lifting the minimums, expanding the deduction base, and adjusting the rate structure for lower income brackets, the measure seeks to reduce the tax friction experienced by families and workers who contribute to the region’s economy. In practical terms, this is about keeping more of what residents earn while maintaining the structural health of the tax system (citation: Generalitat Valenciana, 2024).
In addition to the general framework, several illustrative scenarios provide concrete context for how the reform might play out for typical Valencian households. The cases examine how the increased personal and family minimums, revised rates, and expanded deductions interact under different personal situations. They are meant to demonstrate the policy’s potential to lower tax bills across a spectrum of family types and income levels, rather than favoring any single group (citation: Generalitat Valenciana, 2024).
Case 1. A young single individual under 35 with an income of €28,000 and a mortgage paying toward an €8,000 amortization could see a noticeable reduction in the overall tax burden, thanks to both the higher personal minimum and the enhanced deduction for housing costs. Case 2. A couple with a responsible relative aged 80, earning €30,000 and filing jointly, could benefit from the higher minimums and the broader scope of deductions now available to them. Case 3. A single parent with a 4-year-old child earning €25,800 may experience improved relief from family-based allowances and the revised income bands. Case 4. A two-income couple with two children and income totals of €30,000 and €38,000 may be able to reduce taxable income through joint filing and generous regional deductions. Case 5. A couple investing €6,000 in a home renovation to boost energy efficiency could see this expenditure offset by the enhanced deductions and increased thresholds. Case 6. A couple with two young children in a municipality facing population decline might find relief through both higher personal minimums and expanded regional deductions. Case 7. A person with a 33% disability who earned €28,000 and bought a home with an €8,000 mortgage could benefit disproportionately from the disability-related allowances and housing deductions. Case 8. Young people under 35 paying €8,000 annually in rent, with incomes of €18,000 and €21,000, and filing individually, could qualify for more generous housing and dependent-related deductions. Case 9. A retiree aged over 76 with a €15,000 pension may also see relief from the higher minimums and the expanded set of deductions for the elderly and for those with fixed income sources (citation: Generalitat Valenciana, 2024).
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