The Xunta de Galicia will cut regional income tax and slash the levy on new-home purchases, a move aimed at offsetting inflation and easing access to housing as the autonomous government lifts next year’s budget to 15.16 billion euros.
Galicia cuts income tax and new-home purchase levy

The measures, approved Friday in an extraordinary cabinet meeting, matter because they lower the tax burden on households while also supporting a property market that has been under pressure from affordability concerns. The income-tax change trims the first four regional brackets by 0.25 percentage points and takes effect retroactively from Jan. 1, 2026, meaning taxpayers will see the benefit in the next filing season.

For housing buyers, the bigger economic lever is the cut in the tax on notarized acts tied to new homes, where the general rate falls to 1.2% from 1.5%. On protected housing, the levy drops to zero, a direct incentive for first-time buyers and lower-income households at a time when construction and affordability remain political flashpoints across Spain.
The Xunta also broadened inheritance-tax relief for family businesses, extending relief beyond close blood relatives to more distant relatives and to long-serving employees. That should make ownership succession easier for small and mid-sized firms, reducing the risk that tax friction forces sales or breaks up family-owned businesses.

The budget itself rises 6.4% from the current year, underscoring that the tax cuts are being paired with continued spending growth rather than austerity. For investors, the measures reinforce demand for housing-related activity but also point to a more supportive consumer backdrop in Galicia, where tax relief could help disposable income and transaction volumes.
That combination of lower taxes and higher public spending will be watched for its impact on household consumption, regional construction demand and the broader political pitch for growth-friendly fiscal policy. The main near-term catalyst is how much the tax changes feed through to the 2026 tax return season and whether they translate into more new-home transactions.
| Entity | Gains | Losses |
|---|---|---|
| Galician households | ▲Higher disposable income | ▼Lower public tax take |
| New-home buyers | ▲Lower purchase tax | ▼Higher upfront costs avoided |
| Family-owned firms | ▲Easier succession planning | ▼Less tax revenue for the region |
| Xunta de Galicia | ▲Political support from tax cuts | ▼Narrower fiscal room |

