Despite the daily political controversy over the management of DANAthe government of Carlos Mazón tries to continue with the approval of two decree laws with which he intends to address the emergency and advance recovery and reconstruction in the affected municipalities. One of them includes a battery of tax measures for the people concernedmainly deductions and bonuses for those who lost their homes, cars or businesses.
Thus, the new rule approved by the Consell during its extraordinary session this Tuesday afternoon adds to the direct aid already approved in the amount of 250 million euros. The Council also approved emergency assistance for renting accommodation intended for families or cohabitation units whose usual residence is uninhabitable due to the consequences of DANA for an additional 50 million euros.
In the tax package, benefits are included in the autonomous section of the Personal Income Tax (IRPF)like a 100% deduction of expenses incurred to repair damage caused by the storm to the usual residencewithin the limit of 2,000 euros. According to the Minister of Finance herself, Ruth Merino, it will apply to tax periods concluded in the years 2024 and 2025, with income ceilings of up to 45,000 euros of taxable base in individual taxation and 60,000 euros in common taxation.
In the case of businesses damaged by water and the need to provide capital, the decree-law provides a 45% deduction on the amounts invested during the subscription and payment of shares or social participations following agreements to establish or increase the capital of public limited companies, limited liability companies and work companies or contributions made by partners in cooperative societies.
Of course, this affects entities that develop economic activities and have their head office in the territorial area concerned, which According to the current wording, it is limited to municipalities in which the equivalent of the catastrophic zone has been declared.. In this case, 9,900 euros per taxpayer can be reached.
Houses and cars
Other main measures are that in practice those affected will not have to pay property transfer taxes (ITP) and documented legal acts (AJD) when it comes to home or vehicle purchases to replace those lost by DANA.
The Generalitat has decided to establish a 100% premium on the fee applicable to operations related to the acquisition of properties intended to replace others destroyed or seriously damaged by the storm and to acts of declaration of new construction and/or of horizontal division.
A measure that extends to another of the goods most destroyed by the meteorological phenomenon, automobiles, makes it essential. Given the high accident rate, a bonus of 100% of the ITP and AJD royalty is approved for the acquisition of vehicles replacing those destroyed by floods, provided that said acquisition is carried out between October 29, 2024 and 31 October 2025. both included.
Legacies and Donations
In another transferred tax, the inheritance and donations tax, a 50% bonus is approved in favor of acquisitions due to death made by collaterals of the second and third degree, ascendants and descendants by affinity, of deceased persons following DANA. That is, in cases where they are not first-degree relatives, who had been exempted after the change applied by Mazón upon his arrival at the Generalitat.
Additionally, 100% tax base reductions are incorporated for individuals or entities that receive cash or other types of assets and duties by donation to mitigate property damage sustained by the storm. The application of the advantage will be conditional on the donation being used to compensate for material damage resulting from flooding within 12 months of acquisition.
The approved decree-law includes the exemption from sanitation tax for water consumption carried out in the areas concerned between October 29, 2024 and March 31, 2025 within the territorial perimeter of the municipalities concerned. The truth is that in many municipalities in zone zero they have been without water supply for days, of which the bill includes payment, and the sanitation is very damaged. The Generalitat had already announced that would reduce water collection and waste rates which manages people affected by floods.
Emergency modifications and contracts
The other approved decree-law aims to establish a regulatory scheme that facilitates economic and budgetary management to facilitate the reconstruction of the city after the effects derived from the DANA. Among other questions, The decree establishes the organization of donations to the Generalitat in the face of the emergencybut it also recovers the formulas for getting resources faster and for emergency hiring that were used during the pandemic.
According to the Consell, the system of budget modifications is reorganized in a similar way to what was done to deal with COVID, in order to accelerate its processing and prioritize attention to expenses related to DANA, which implies to eliminate limitations. This also includes measures to streamline the aid and subsidy regime and to “regulate” emergency hiring justified by the need to act immediately. Precisely, the current Consell has been very critical of the government of Ximo Puig for resorting to these formulas with fewer controls.
