The arrival of 2026 brings something new for the pockets of Madrilenians. Both the regional government of Isabel Díaz Ayuso and the municipality led by José Luis Martínez-Almeida once again waved the economic flag of the PP with new tax cuts. Although … Most of them choose to reduce the tax burden, for example with financial aid for young people and historic businesses. They also raised other rates, like water, which is rising across the region after a frozen decade.
Another of the main new features will be the way in which each municipality calculates the garbage rate. In the case of the capital, the Town Hall will implement new parameters which, according to the Treasury Department, “will provide greater fairness and legal certainty in its calculation” and are closer to the “polluter pays” principle.
Help for young people and businesses
Since January 1, those under 30 who combine studies and employment, as well as businesses in the region that have more than fifty years of existence behind them, can request aid from the Community of Madrid.
In the case of young people, they can request a deduction from personal income tax, but on condition that they prove that they are enrolled in a complete course and justify that they carry out a professional activity, whether independent or salaried and for at least 300 days per year: of these, a minimum of five months must coincide with the school period, excluding training contracts. Concretely, thanks to this incentive, they will be able to deduct 50% of tuition fees, with a maximum ceiling of 400 euros per year and per taxpayer.
The Regional Executive estimates that some 15,000 young people will be able to benefit from this measure, for which a maximum of 6 million euros will be allocated, “in order to support their efforts and their contribution to the productive fabric of Madrid”.
For their part, historic establishments, those over 50 years old, can benefit from a 95% bonus on the tax on real estate transfers and documented legal acts. Thus, those who buy or rent real estate intended for commercial, hotel or service activities in operation for more than half a century and maintain the same activity will benefit from this reduction from 2026. The regional government estimates that around 1,500 companies in the region will be able to benefit from this measure and thus achieve its objective of “promoting the continuity of these emblematic companies, by reducing the tax burden linked to the transfer of ownership”.
The new calculation of the waste rate
Mayor Almeida tried to put an end to the controversial calculation of the garbage rate. Thus, it decided to change the model it had chosen to charge this national tax to Madrid residents in the capital, given that each municipality can choose its own formula to apply. If in 2025 a variable portion was billed which took into account the waste generated by each person depending on the neighborhood in which they live, in 2026 this changes and is billed according to the people who live in the accommodation.
In this way, the Town Hall now enters the number of inhabitants registered in residential properties to calculate the garbage rate. In this way, a new variable is included to calculate the fee by adding a base rate, which all properties pay for the availability of the waste collection and treatment service, and a rate per generation.
On the other hand, garages for industrial cadastral use which are intended, in their entirety, for exclusively residential parking, will not pay the fee, “thus resolving one of the problems that generated some complaints when the fee was applied in 2025”, according to Cibeles.
The water bill still increases by almost 3%
Since January 1, the Community of Madrid has also increased, for the second time in a year, its water bill by an additional approximately 3%. With this, Ayuso continues its project to gradually increase, up to a total of six times, this tariff until 2030 and thus be able to renew the infrastructure of the Canal de Isabel II.
The Regional Executive considers these increases necessary after ten years without updating the rates. And while the increase represents around 50 cents per month for an average consumer of water from this canal, the infrastructure estimates that it will earn around 598 million for its renewal.
Less tax pressure on cars and housing
The capital’s city council has introduced other changes to lighten pockets. On the one hand, it modifies the criteria for applying premiums for the Tax on Mechanical Traction Vehicles (IVTM), modifying the current model depending on the type of engine and fuel and using environmental stickers instead. In addition, a 50% bonus is added to the least polluting vehicles of large fleets (CERO, ECO YC) provided that they register their vehicles in Madrid and annually renew a percentage of them for others with less polluting labels. Likewise, the popular government applies a new reduction in the IBI to all Madrid residents: it goes from 0.428% to 0.414%.
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