Spanish regions announce tax cuts for 2027 budgets

Spanish regional governments in Extremadura and Castilla y León have announced significant tax reduction plans as part of their upcoming 2027 budget preparations.

In Extremadura, the regional government intends to lower the first two brackets of the regional Personal Income Tax (IRPF) by 0.25 percentage points. This would bring the rates to 7.5% and 9.5%, respectively. The measure specifically targets lower-income earners, such as those earning approximately 1,000 euros per month, to mitigate the rising cost of living. Additionally, the regional government plans to reduce the Property Transfer Tax (ITP) for certain groups purchasing housing from 4% to 3.5%.

In Castilla y León, President Alfonso Fernández Mañueco announced that the administration is finalizing the 2027 General Budgets. The plan includes a package of 36 new tax cuts aimed at families and businesses to alleviate their tax burden and bolster regional competitiveness. Mañueco highlighted the region's economic growth, noting positive industrial production and record employment and export figures.