Valencia Announces IRPF Rate Cuts for All Income Groups. Valencian authorities will reduce the regional IRPF for all income brackets. The decision will affect 2.7 million taxpayers and will come into effect for 2026 tax returns. The main impact is expected for citizens with incomes up to €80,000.
The authorities of the Valencian Community have announced a large-scale reduction of the regional IRPF rate for all income categories. The new rules will take effect for the 2026 tax return, which residents will file in 2027. According to the regional government, the changes will affect 2.7 million taxpayers, with the greatest impact expected for citizens earning between 32,000 and 72,000 euros per year.
According to José Antonio Rovira, Councillor for Economy, Finance and Public Administration, 72% of those benefiting from the reform have incomes below 30,000 euros, and 87.3% of the total tax savings will go to those earning less than 80,000 euros. The overall tax relief is estimated at 160 million euros. Authorities emphasize that the rate reductions will be implemented in stages: the first wave of changes will affect returns for 2026, and the second is scheduled for 2027.
Rovira noted that, until now, the Valencian Community had some of the highest IRPF rates in the country. Now, the region is moving towards a fairer and more sustainable tax model, with a primary focus on supporting low and middle incomes. The reduction in rates will range from 0.2 to 0.6 percentage points, with the most noticeable decrease provided for the 32,000–72,000 euro bracket. For incomes over 150,000 euros, the tax parameters will remain unchanged.
The authorities emphasize that the new tax policy will not lead to cuts in social spending. According to Rovira, the 2026 budget allocates 80% of funds to healthcare, education, and housing. He also recalled that significant tax benefits have already been introduced in the region earlier: an almost complete (99%) discount on inheritance and gift tax, as well as additional deductions for health and sports-related expenses. Starting June 1, 2026, a new property transfer tax rate for relatives has come into effect—reduced from 10% to 9%, and for documented legal acts—from 1.5% to 1.4%.
Additionally, for a group of relatives (siblings, uncles, nephews), the inheritance and gift tax has a 25% discount, which will increase to 50% next year. According to Rovira, these measures are designed to facilitate the transfer of family businesses, which is especially important for the region, where more than 90% of companies are family-run.
The context of tax changes in Valencia becomes especially noticeable against the backdrop of other regional reforms. For example, an investigation continues in Alicante regarding the allocation of privileged housing, where a former official cited memory lapses, and the court denied the Generalitat party status in the case. More details about this case can be found in the article about the trial on luxury housing in Alicante.
For reference: IRPF is the main personal income tax in Spain, levied both at the national and regional levels. In recent years, regions have received greater authority to adjust tax rates, allowing them to tailor the tax burden to local economic conditions. In the Valencian Community, tax reforms are traditionally accompanied by debates over balancing support for social spending with reducing fiscal pressure on citizens.
