Extremadura lowers its personal income tax: "We had one of the lowest incomes and one of the highest rates in the second section"

Since last September 12, Extremadurans have new sections of personal income tax. This is established by Decree-Law 4/2023, approved by the Government of Extremadura, which has established the lowest application in all of Spain in remunerations of up to 20,200 euros per year..

As a result, these first two tranches have gone from 9.5% to 8% and from 12.5% to 10%, something that produces savings per taxpayer of almost 300 euros.. This is a measure applied retroactively to January 1, 2023. The rest of the sections are configured as follows:

In this way, María Guardiola's government “corrects a grievance that meant having one of the lowest incomes in the country and having to bear one of the highest rates in the second section,” they say from the Junta de Extremadura.. “This complies with what is established in article 31 of the Spanish Constitution and in article 3 of General Tax Law 58/2003 of December 17 on economic capacity, equality, progressivity, tax justice and non-confiscatoriality”. The objective, they say, is to “return to families what they have paid too much in recent years”.

Rental deduction, estate tax….

The same Decree Law has also established an increase in the deduction for renting a habitual residence, going from 5% or 10% in the case of residing in rural areas, to 30%.. Likewise, the annual deduction limits of 300 and 400 euros are increased to 1,000 and 1,500 euros and for the first time single-parent families will be able to benefit from this bonus..

Another tax that is modified is the Heritage tax, which is 100% discounted; as well as enrollment, which drops from 16% to 14.75%. In addition, before its entry into force scheduled for January 1, the tax on empty homes for large owners already taxed in personal income tax with income imputations at 1.1% or 2% of the value has been eliminated. cadastral and with the possibility of being taxed in the IBI with a surcharge of 50%.

The next tax to modify is the inheritance and donation tax, “which is currently subsidized at 99%, which means that many taxpayers barely pay taxes but have to declare something. The reduction for groups I and II (the closest relationships), which stands at 18,000 and 15,956.87 euros, will be raised to 500,000 euros. This will make the taxable base zero, zero installment and zero income.. This measure will mean that the majority of inheritances in Extremadura will not have to pay,” the Board insists..

Finally, given the situation caused by storms that have caused damage to the Extremaduran countryside, aid of 1.4 million euros is established for cherry producers through aid with a maximum amount per hectare of 2,500 euros..

“Equality and tax justice are strengthened”

The Executive defends that, until the arrival of these measures, “Extremadura was one of the autonomous communities with the greatest fiscal pressure in the entire country. This meant that Extremaduran taxpayers paid the highest regional taxes with the lowest incomes.. A clear inequality in relation to other autonomous communities that surround it and that played with an “advantage” when it came to attracting investors and establishing a population.”.

Thus, the new Decree Law “adopts urgent measures to reduce the tax burden borne by taxpayers, in addition to aid for foster care, new self-employed workers and cherry producers.” All of this “strengthens the principle of equality and tax justice, which promotes and accompanies those who generate wealth and employment and whose purpose is to attract investment and prevent more population from being lost in our region,” they conclude.