In the new year, Spanish consumers will see changes in their pockets due to the economy. They are saying goodbye to tax breaks on food and energy and are facing the return of a 21% VAT on electricity bills. This means that consumers will see a return to the pre-energy crisis era, whether they are in the regulated market or in the free market. The 21% VAT on electricity will be reinstated, but the ban on cutting off water, electricity, and gas for vulnerable consumers will remain in place.
After the exceptional VAT reductions on electricity bills during the crisis, the tax had varied from 21% or 10% depending on the previous month’s electricity market price exceeding the 45 euros per megawatt hour threshold. Changes have also been made to the electric social bonus, with reductions for vulnerable consumers and severe vulnerabilities. The 1.8 million beneficiaries of the social bonus will see a decrease from 57.5% to 50% for vulnerable consumers, and from 72.5% to 65% for severe vulnerabilities. Further reductions will come into effect on July 1st, with discounts of 35% and 50% for vulnerable consumers and severe vulnerabilities respectively.
It is important to note that the renewal of the social bonus is automatic for all eligible groups, and no renewal request is required. In addition to changes in electricity prices, the price of butane gas cylinders will also be updated in January. In November, the price had increased by 4.27% to 16.61 euros, and the regulated gas tariff for individuals will increase by 10% (but still remain 22% cheaper than a year ago). The communal gas tariff will increase between 13.5% and 18.3%, as published in the BOE.
Other price changes in 2025 include a decrease in mortgage rates, but the return of the VAT on electricity and food items. The economic landscape for Spanish consumers is constantly evolving, with adjustments to VAT rates, social bonus discounts, and gas prices. Despite these changes, measures such as the prohibition of cutting off essential services for vulnerable consumers provide some stability in uncertain times. As the year progresses, more changes may occur, affecting the overall cost of living for Spanish households. Awareness of these changes is essential for financial planning and budgeting in the new year.
