99% Relief for Transferring a Family Business
The Government of the Valencian Community is set to dramatically reduce inheritance and gift tax to facilitate the seamless transfer of family-owned enterprises—including farms, professional practices, and shares in holding companies—from one generation to the next without imposing a heavy tax burden. This initiative offers a 99% tax relief on asset transfers for relatives up to the fourth degree of kinship and applies to all heirs when the business founder has retired.
Expanded Personal Income Tax Deductions
Juanfran Pérez Llorca, head of the regional government, emphasized that family businesses constitute over 90% of the Valencian region’s business landscape and contribute approximately 80% of local employment and GDP. He further highlighted that nearly one million taxpayers with a taxable income up to €60,000 for individuals or €78,000 for married couples will benefit from new personal income tax deductions. These deductions cover medical expenses—including dentistry, optometry, and mental health care—as well as costs related to sports activities and treatments for rare or chronic illnesses.
Additional Tax Incentives
These new measures complement existing benefits, notably:
- A 99% discount on inheritance and gift tax for transfers between children, spouses, and parents;
- For siblings and nephews/nieces, relief will increase from 25% in 2026 to 50% in 2027;
- The property transfer tax rate has been lowered from 10% to 9%, with a further reduction from 8% to 6% for buyers under 35 purchasing their primary residence;
- The general rate for documented legal acts has been reduced from 1.5% to 1.4%.
Streamlining Regulations and Accelerating Procedures
Pérez Llorca underscored that these tax reductions are paired with robust public services enabled by efficient governance. Among the reforms, a decree-law was approved to simplify over 1,300 articles across 170 regulations, enhance commercial flexibility, reinforce legal certainty, and impose a maximum one-month deadline for issuing permits to connect to the electricity grid. This regulatory overhaul has successfully cleared more than 10,000 pending cases, significantly boosting economic and administrative activity throughout the Valencian Community.