The Valencian government will raise personal income tax to the highest brackets from 2024
The Valencian Government Income tax will rise to the highest bracketsjust like him Wealth Tax for fortunes greater than €1.3 millionand will create a new rate of 11% in the Property Transfer Tax for real estate purchases of more than one million euros. These changes will apply from 2023, but will not take effect until the 2024 tax returns.
This has been agreed today by the Governing Council of the Generalitat, although its approval has been postponed until Monday and It will be effective in the 2024 income statement, that is, after the regional elections in May and the general elections at the end of the year. This has been explained by the Vice President of the Valencian Government, Aitana More and the Minister of Finance, David Spainwho today presented the tax reform approved by the Governing Council of the Generalitat, which also includes a package of tax reductions for income tax for medium and low incomes and an increase in deductions.
The agreed tax increases have been pending approval before next Monday and will affect the personal income tax rate for 2023as well as the modifications to the Wealth Tax, which will be included in the budget and which will be what citizens will pay in the income statement they make in 2024. Regarding this second part of the agreement, the vice president explained that minimums and deductions will be maintained and has indicated that a new personal income tax rate will be created so that “the highest brackets contribute more.” will also increase in 0.25% the highest sections of the asset value for those who have a wealth of more than 1.3 million euros, not counting the minimum exempt and the value of the habitual residence. With this proposal, they hope to raise 25 million euros.
New rate of 11% in Property Transfers
Likewise, a new rate of 11% will be created in the Property Transfer Tax for real estate purchases worth more than one million euros, with which they hope to raise 15 million. Asked if the government that comes out of the next elections (scheduled for May 2023) could modify these measures, the vice president indicated that “in the same way as the 2022 reform retroactively approveda new government could retouch the one that is approved” on the income of 2023.
What the plenary session of the Consell of the Valencian Community has approved today has been the Law on Fiscal Measures, Administrative and Financial Management and Organization of the Generalitat, known as ‘accompanying law’ of 2023, as well as the tax reform of 2022, which will mean a lower tax bill for 97% of Valencians. The proposals are specified in an increase in exempt minimums and more deductions.
The members of the Valencian Government have approved two separate texts: a draft law for the accompanying law and a decree law for the tax reduction, which will be noted in the next income statement, since it affects the year 2022 retroactively. The accompanying law includes the rates and taxes of 2023. In this way, The measures that affect income of less than 60,000 euros will be effective from January 1before the next regional elections, while the rest (including increases for higher incomes) would be applied already in 2024.
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