The Catalan government has approved a draft record budget for 2026, amounting to over 49 billion euros, with a strong emphasis on housing and education. Simultaneously in Madrid, the Congress of Deputies has rejected for the second time a proposal to extend the 15% tax relief on IRPF for the purchase of electric cars, sparking criticism from the automotive sector. At the same time, the revaluation of pensions and new benefit thresholds for farmers were approved.
Catalonia's record budget
The draft envisages expenditures exceeding 49 billion euros, including record amounts for education (8 billion) and housing (1.9 billion).
End of electric car incentives
The Congress of Deputies did not extend the 15% tax discount for the purchase of electrified vehicles.
Pension revaluation approved
New pension rates for 2026 were officially adopted, adjusting them to the cost of living.
Support for agriculture
The government plans to increase financial aid for young farmers by 10% within EU funds.
The Catalan government, led by Salvador Illa, has presented a draft budget for 2026, which envisages expenditures of 49.16 billion euros, representing an increase of nearly 10 percent compared to the previous year. This document, described as "expansionary," places particular emphasis on social policy. A record 8 billion euros has been allocated to education, and 1.9 billion euros to housing, intended as a response to the growing housing crisis in the region. Despite the government's ambitious plans, the draft still requires the support of the ERC party to be finally passed by the regional parliament. In the heart of Catalonia, Barcelona councilors made significant decisions affecting residents' daily lives, approving a 50% discount on the cost of school lunches in kindergartens and primary schools, although the unit price of a meal was simultaneously raised to 7.83 euros. At the same time, significant legislative decisions were made at the national level in Madrid. The Congress of Deputies rejected an amendment proposing to maintain the 15% discount in the IRPF tax for the purchase of electric and plug-in hybrid cars. This is a severe blow to the automotive industry, which warns that the lack of financial support will slow down the country's energy transition. Manufacturers and dealers are calling for urgent political consensus, pointing out that this sector is crucial for the economy and the achievement of the European Union's climate goals. The Spanish system of fiscal decentralization allows autonomous communities, such as Catalonia, considerable independence in shaping spending on education and health, but major tax reliefs remain under the purview of the central government in Madrid.In the sphere of social policy, Congress finally approved the revaluation of pensions for 2026, setting new maximum and minimum rates. The changes will affect millions of Spaniards, adjusting benefits to inflation indicators. Additionally, the Ministry of Agriculture proposed a 10 percent increase in aid under the CAP, aimed at facilitating intergenerational succession in rural areas. „El fin de la deducción es un paso atrás en la descarbonización del transporte y un golpe a los ciudadanos que quieren ser ecológicos.” (The end of the deduction is a step backwards in the decarbonization of transport and a blow to citizens who want to be ecological.) — Representative of the automotive industry In the public debate, a constitutional issue concerning the protection of the right to abortion also emerged. The Council of State issued an opinion supporting the inclusion of this right in the constitution, but suggested to the government the need for deeper legislative changes than initially planned, so that this mechanism would be legally effective and durable.
Mentioned People
- Salvador Illa — President of the Generalitat de Catalunya, responsible for proposing the region's record budget.
- María Jesús Montero — Spanish Minister of Finance involved in talks with the agricultural sector and tax issues.