On June 2025, the Generalitat Valenciana published Law 5/2025, introducing a set of fiscal measures that suggest a clear shift in approach. Among the most notable is the increase in the wealth tax exemption threshold, which will rise from 500.000€ to 1.000.000€ as from 31 December 2025.
This change applies to both resident taxpayers and non-residents with property located in the Valencian Community. In practical terms, a greater number of individuals will find themselves outside the scope of the tax, especially those whose assets were previously just above the former threshold.
A complementary inheritance tax framework
This reform follows the introduction of a 99% rebate on inheritance and gift tax for close relatives — a measure already in place in several other autonomous communities. The aim is to ease intergenerational transfers and to simplify family succession planning.
In parallel, the new law introduces phased reductions for transfers between collateral relatives. A 25% rebate will apply from June 2026 to inheritances and gifts between siblings, uncles, aunts, nephews and nieces, increasing to 50% from June 2027. While these figures do not yet match the most generous regimes in Spain, they are a welcome improvement on the previously limited relief available in such cases.
A favourable trend, with room for further progress
The combination of a higher wealth tax exemption and expanded inheritance and gift tax rebates marks a positive development for taxpayers in the region. It enhances the scope for succession planning and wealth structuring, particularly for those who may have found previous rules to be overly restrictive.
Valencia is not yet among the regions with the most generous tax frameworks, but it is moving in that direction. The reforms introduced under Law 5/2025 suggest a growing willingness to create a more competitive and coherent fiscal environment — one that may continue to evolve in the years ahead.
