Gecko Towers
The costs of purchase of a property in Andalucia have, for some, been the source of some concern. It may be fair to say that they have not dissuaded them from purchasing, but an additional 10% to 12%, on top of the agreed purchase price, is quite a hefty price to pay.
Please see a piece I wrote a number of months ago that set out in some detail the precise property purchasing costs. The Buying Costs of a Marbella Property
Well, it appears that the Andalusian Government in Seville has realised that the current level of purchasing costs may be acting as a limiting factor to those keen to enter the local property market.
Akin to similar steps taken by the London government that has acted as a successful stimulus to the UK property market the Andalusian regional government – please note this only affects properties located in the autonomous region of Andalucia – has announced a Decree whereby Property Transfer Tax will be fixed until 31st December 2021 at 7% rather than being applied on a sliding scale between 8% to 9% to 10%.
So what does this mean in practice? In simple terms, for an apartment with an agreed purchase price of €400,000 the temporary flat rate of 7% will mean a transfer tax payment of €28,000 instead of the previously applicable 8% or €32,000. The purchaser will make a net cash saving of an impressive €4,000. For higher priced properties, that would have been caught in the higher percentage rate bands, the hard cash savings would be even more attractive.
In addition, and for the same period to 31st December 2021, local Stamp Duty will be reduced to 1.2% from 1.5%.
It should be noted that I have been advised that these new arrangements will largely affect resale properties. Meaning that usual newly built properties will continue to attract 10% IVA. However, I am also told that such new properties will also benefit from the reduction in Stamp Duty to 1.2% until 31st December 2021.
It is hoped that these material reductions will be greeted with widespread enthusiasm leaving potentially large sums in buyer’s pockets to contribute towards the costs of furnishings – or even a nice bottle of Cava to celebrate their new acquisition.
Should you be interested in discussing the processes 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 team of 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.