Does a tax break still count as emergency relief five years on? Spain's parliament answered the practical side of that on Wednesday 23 September. It approved Royal Decree-Law 23/2026 with 300 votes in favour, 38 against and 10 abstentions. The decree was passed by the cabinet on 8 September and has applied since then. Congress had thirty days to confirm or repeal it.
Voting in favour were PSOE, PP, Sumar, EH Bildu, PNV, Podemos, BNG and UPN. Vox and Junts voted against. For anyone living on La Palma, the headline is that the 60% deduction on IRPF, Spain's personal income tax, is extended to the 2026 tax year. Territorial Policy Minister Ángel Víctor Torres, who presented the decree, said approval means the cut shows up straight away in residents' payslips.
€100 million for the land
The decree also allows the Canary government to spend €100 million of its 2025 surplus on farmers and livestock keepers hit by the 2021 eruption, now generally known as Tajogaite. According to the Government Delegation in the Canaries, the money will cover lost output in 2024, 2025 and 2026. It will also pay to rebuild farm infrastructure: tool sheds, stables, irrigation systems, banana packing houses, warehouses and fields. It sits outside the spending rule and can be increased if needed.
The smaller print matters too. Farmers in El Paso, Los Llanos de Aridane and Tazacorte with outstanding loans get a new moratorium. Self-employed workers claiming extraordinary cessation-of-activity benefits will no longer have POSEI farm subsidies counted as income, and some income benchmarks now use 2020 instead of 2019. The day before the vote, the cabinet also approved €33 million in extra credit for reconstruction agreements with the island's Cabildo and town halls.
Island money, not Madrid's
Coalición Canaria MP Cristina Valido stressed that the €100 million is not a special transfer from Madrid. It comes out of roughly €600 million of Canary government surplus that the region can now spend. In her words, the Canaries will finally be able to use its own money.
That is where the decree reaches beyond La Palma. Regions whose debt was under 12.4% of GDP at the end of 2025 may invest their surplus in "financially sustainable" projects, housing included, instead of paying down debt, without breaching the spending rule. Eight regions qualify: the Canaries, Asturias, Navarre, the Basque Country, Andalusia, the Balearics, Cantabria and Galicia, together close to €4 billion. The Canary share is over €600 million. Sources differ slightly on timing: the government note mentions 2026 and 2027, while Canarias7 refers to investments running into 2028.
Nobody in the chamber said when the La Palma tax break will end, or how. For now it is renewed one year at a time, and five years after the lava stopped it has become part of how the island's economy works.