The Andalusian Government has recently approved a lower general rate of the Transfer Tax and Stamp Duty in order to boost the real estate industry. This is currently in force until 31st Dec, 2021. The goal is to reactivate the real estate sector, encourage second home purchases, benefit purchasers, create incentive for new construction at more affordable prices and in general boost the market in all areas.
This measure consists of the reduction of the general tax rate applicable to the transfer of real estate and will be levied at a flat rate of 7% on the purchase of resale properties, land and garage spaces. Plus a reduced stamp duty rate reduced from 1.5% to 1.2%.
And example provided by the Junta de Andalusia states that,
Under normal circumstances a transfer tax of a property valued at 180,000 euros between two individuals would be calculated at taxable rate of 8% resulting in a tax liability of 14,400 euros. At the new reduced rate of 7%, the tax liability is 12,600 euros. Thus, resulting in a saving of 1,800 euros.
Following this, transfer between individuals of a parking space worth 24,000 euros, until now the tax payable was 1,920 euros (8% rate), but with the new 7% rate, the resulting tax payable is 1,680 euros, which so the saving is 240 euros.
Generally property tax in Spain is lower than other European countries and in Andalusia you can for the moment take advantage of the reductions when buying a home. When purchasing property in Spain you should be prepared for all taxes and fees, including annual taxes and the tax implications of selling a house. The cost of buying, owning, renting out, and selling a property in Spain will vary based on the location, type of property, your residency status, and the community where you choose to buy. If you have been considering purchasing property in Spain then now really is an excellent time to take action and benefit from the tax savings. Chat with one of our expert team today.