As of 28th April 2021, in order to stimulate the local economy the Hacienda (Spanish tax authority) has agreed with the Junta de Andalucia (Andalucian regional government) to drop the rate of 'transfer tax' on any resale property purchased until the end of 2021 to a flat 7%, regardless of the property value. This means there are significant tax savings to be made when purchasing this year.

The property transfer tax is a usually progressive tax that depends on the price of the property. It varies according to each Autonomous Community in Spain, but in Andalucia the following rates usually apply:

• Up to 8% for a purchase price of 400.000€
• 9% on the increment where the price of the property goes from 400.000€ to 700.000€
• 10% on the increment from 700.000€ and above.

This means the following tax savings can be made when buying and completing a resale transaction before the end of 2021:

Purchase price: 250.000 Euros =  tax saving of   2.500 Euros
Purchase price: 400.000 Euros =  tax saving of   4.000 Euros
Purchase price: 500.000 Euros =  tax saving of   6.000 Euros
Purchase price: 1m Euros         =  tax saving of 19.000 Euros
Purchase price: 2m Euros         =  tax saving of 49.000 Euros

 

In addition to this, stamp duty has been reduced from 1,5% to 1,2% until the end of the year.

 

I hope this information is helpful to you. Of course this is not financial advice. You are recommended to still consult a lawyer or fiscal advisor to confirm tax rates and fees before making any property purchase.

 

To your success,
Anthony