The Catalan government has approved Decree-Law 5/2025, dated March 25, introducing urgent tax, personnel expenditure, and administrative measures. The decree was published in the DOGC on March 26, 2025.

This new set of tax reforms aims to create a fairer and more progressive tax system while providing greater support to young people, middle- and low-income earners, and vulnerable groups. The changes, which affect Personal Income Tax (IRPF), Property Transfer and Stamp Duty (ITP-AJD), and Inheritance and Gift Tax, are designed to ease tax burdens, improve access to housing, and promote a more socially and environmentally sustainable economy.

1. Personal Income Tax (IRPF) – Effective January 1, 2025

  • The tax rate for the lowest income bracket is reduced from 10.5% to 9.5%.
  • The tax structure is simplified, reducing the number of brackets from nine to eight, particularly benefiting those earning under €33,000 per year.
  • Improved rent deductions for primary residences:
    • The age limit for eligibility increases to 35 years.
    • The income threshold rises from €20,000 to €30,000.
    • The deductible amount increases to €500 (or €1,000 for joint tax filers, large families, or single-parent households).
    • The requirement that rent must exceed 10% of income to qualify is removed.

2. Property Transfer and Stamp Duty (ITP-AJD) – Effective June 27, 2025

  • New progressive tax brackets for property purchases:
    • Up to €600,000 → 10%
    • €600,000 – €900,000 → 11%
    • €900,000 – €1,500,000 → 12%
    • Over €1,500,000 → 13%
  • A 20% tax rate applies to:
    • Property purchases by large-scale landlords.
    • Acquisitions of entire buildings, except when purchased by an individual (up to four units intended as primary residences).
  • The 70% tax reduction on property transfers by real estate companies is eliminated (effective March 27, 2025).
  • A 3.5% tax rate applies to property transfers between companies when opting out of VAT exemption.
  • Social and environmental incentives:
    • 100% Stamp Duty exemption for first-time homebuyers under 35 years old.
    • 50% reduction in Property Transfer Tax and Stamp Duty for:
      • Office buildings or unfinished structures converted into affordable housing.
      • Properties repurposed as company headquarters or business centers.
    • Zero tax rate on transfers of zero-emission vehicles.
    • 100% exemption on Property Transfer Tax for transfers to non-profit housing cooperatives.

3. Inheritance and Gift Tax – Effective June 27, 2025

  • 99% tax exemption on inheritances when the heir is a victim of gender-based violence.
  • 95% tax reduction on donations to victims of gender-based violence for home purchases, up to €100,000 (or €200,000 for recipients with a ≥65% disability or dependent minors).

For personalized tax advice, contact our experts at addwill’s tax department via phone: +34 934 875 200, email: comunicacio@addwill.eu, or fill out this form.