Alicante has posted a sharp rise in tax revenues this year, despite regional tax cuts, with the property market driving growth across the Costa Blanca.
Figures from the Valencian Tax Agency (ATV) show the Generalitat collected €114 million more in Alicante between January and June compared to the same period last year, largely thanks to real estate transactions.
Tax revenue rises despite cuts
The Generalitat’s revenue from its own and transferred taxes increased by 13.6 per cent year-on-year, reaching €1.105 billion in the first half of 2025. According to data presented by Finance Minister Ruth Merino and ATV director Angel Zaera, Alicante led the way with a 24 per cent jump, from €468 million in early 2024 to €582 million this year.
The biggest driver was the Property Transfer Tax (ITP), paid when buying or selling a home. Revenue from this tax in Alicante grew from €346 million to €431 million, reflecting strong demand in the housing market.
Merino said the numbers, combined with “selective fiscal relief,” showed the government’s strategy was working. She added, “The Consell will continue on this path of social fiscal policy with lower taxes for everyone, of which we are proud,” as reported by Todo Alicante.
Who’s gaining from tax breaks?
Key tax changes include the abolition of the Inheritance and Donations Tax in May 2023 and reduced ITP rates for young buyers and vulnerable groups introduced in 2024. By June this year, Alicante residents had saved €20.3 million on inheritance and donations, while across the region the savings reached €38.3 million.
Young first-time buyers made the most use of the reduced ITP, with 7,163 declarations in Alicante alone, saving an average of €1,458 each.
Alicante’s luxury housing market
Behind the booming tax receipts lies Alicante’s growing reputation as a hotspot for high-end property. According to a report by Idealista, average house prices in the city reached €2,435 per square metre in June 2025, while rentals averaged €12.40 per square metre.
In the most exclusive neighbourhoods, prices are far higher:
Playa de San Juan – €3,925/m²
Historic Centre – €3,264/m²
Cabo de las Huertas – €3,209/m²
Ensanche-Diputación – €3,097/m²
Albufereta – €3,086/m²
Luxury listings include a €9.4 million beachfront villa in Cabo de las Huertas and a €7 million contemporary villa in the same area.
Famous faces and foreign demand in Alicante
Alicante’s appeal is not limited to investors. The city has become home to celebrities such as actresses Ana Milan and Vanesa Romero. Its lifestyle continues to draw wealthy expats seeking the Mediterranean climate.
While the Generalitat celebrates higher revenue alongside lower taxes, experts warn that Alicante’s “effort rate” for buying homes is now 30 per cent of income, and rents swallow 38 per cent. Rising property prices may benefit public resources, but could push affordability further out of reach for locals.
With luxury villas selling for millions and young buyers squeezed by high prices despite tax breaks, is Alicante’s property boom sustainable?
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