Gecko Towers
Unlike Mr Sunak’s short term property market incentive, Andalucia’s initiative, passed in April 2021 to encourage the purchase of a property in Andalucia, has been revisited. The tax discount was due to finish on 31st December 2021 when the previous regime would have been reinstated.
The result is great news to potential buyers of their dream property in Andalucia where the buying costs have often appeared high.
In October 2021 the liberal coalition regional government (the Junta de Andalucia) in Seville, together with the support of the right wing VOX party, continued with its avowed plan to reduce taxes, including Stamp Duty (Actos Jurídicos Documentados or AJD) and Property Transfer Tax (Impuesto de Transmisiones Patrimoniales or ITP).
The result is that the new law, as adopted, now reduces the ITP in respect of purchases of qualifying properties in Andalusia permanently to 7%
The Springtime measures replaced a previous sliding scale and imposed a flat rate of 7% calculated on the sales price of the “resales” or “second hand” property. Such property is distinct from “new” property sales – which are generally newly finished and former off-plan purchases – that continue to attract local VAT (IVA) at the rate of 10%, as an alternative to ITP.
A further tax that solely affects “new” property sales in Andalucia is AJD. This was also reduced in March 2021, by the same government instrument, and dropped down from 1.5% to 1.2%. Calculated on the sales price of the property . This has also been modified to become permanent.
Compared to previous sliding scale regimes of ITP and the higher rate of AJD, the cash savings that a property purchaser in Andalucia can make are significant. As one would expect, the higher the value of the property being purchased the greater the savings.
We have a comprehensive blog post on the costs of purchase of a property in the Marbella region of Andalucia The costs of buying a Marbella property
We’d encourage you to continue to explore this and our other many blog posts. We hope you will find comprehensive answers to many of the perplexing issues that arise in the purchase of a property in Andalucia.
Should you be interested in discussing the legal process involved in buying a property in the Marbella region, we would be delighted to assist you. Our team of bi-lingual, highly experienced and wholly independent Abogados are ready to help you.
Please call me, Mark FR Wilkins, during usual business hours on +34 600 343 917 or, if you prefer, or e-mail me at mark@roslegal.es
Please note that our posts are for general interest. They is no substitute for proper legal advice tailored to your specific circumstances as provided by a qualified Abogado who is experienced in the application of the Spanish Law.
Nothing contained in this article should be seen or taken as the writer or the publisher providing legal or financial advice.
© Mark FR Wilkins 2021. All rights reserved.