Great news! Until the end of the current year (2021), transfer tax will be set at a flat rate of 7% on the purchase of resale properties, building land and garage spaces. Additionally, stamp duty will be charged at 1.2%, rather than at the previous rates, see an example below! These reduced rates only apply to Andalucia.
The Junta de Andalucia, has recently announced a cut to resale property transfer tax and also stamp duty for the remainder of 2021, which is great news! This move is designed to benefit buyers and additionally boost sales at every level of the market.
A tax reform deal struck between the coalition government has ushered in a series of fiscal changes. These will affect many taxes paid by Andalusian residents from 2022 onwards. The goal is to lighten the tax burden on as many as four million people. This will result in savings of approximately 300 million euros for citizens while seeking to reactivate economic activity.
On March 27, the Junta de Andalucia passed the first measures, which will be of great interest to all property owners in Andalucia. These are:
- Reduced property transfer tax to a flat rate of 7%
- Lower stamp duty from 1.5% to 1.2%.
Until the end of December 2021. As a result, the government expects to collect over 200 million euros less in related taxes before the start of 2022.
Until now, transfer tax has been levied at a variable rate, depending on the purchase price and also the type of property in question. The lowest rate was 8% and rose to 10% on purchases of resale property, building land and garage spaces bought from private sellers. The rates of IVA due on sales of new-build properties and land by professionals remain at 10% and 21% respectively.
Juan Marin, the vice-president of the Andalucian regional government, detailed two examples of how the tax cuts will benefit those at the more accessible end of the market.
When acquiring a property that sells for 180,000€, buyers will get to keep 1.800€ for the remainder of 2021. A garage space that changes hands for 24,000€ will be liable for 240€ less in ITP.
In the case of more expensive properties in Andalucia, the potential tax benefits are even higher. The transfer tax due on properties sold for one million euros has been slashed from 89,000€ to just 70,000€. Every million thereafter will result in savings of 30,000€ through to the end of this year. If you’re considering investing in a home in southern Spain, now is definitely the time!
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