Tax Reduction on transfer of Real Estate Property – Andalucia

Since the announcement of the pandemic and the introduction of emergency situations in the country, the legislative framework of Spain has announced many updates which have also resulted in many positive changes for those living in Spain!

To attract more real estate investment to the region, the Andalusian government has decided to temporarily REDUCE the transfer tax (Impuesto de Transmisiones Patrimoniales) and the Stamp duty on legal acts (Actos Jurídicos Documentados).

We couldn’t expect such a gift! So, what awaits us:

Impuesto de Transmisiones Patrimoniales is paid on the transfer of ownership, for example, when buying and selling land, real estate, secondary housing, etc. The tax must be paid by the beneficiary to whom the ownership is transferred, i.e. customer.
Until today, Andalusia has applied a rate of 8, 9 and 10%, depending on the amount of the taxable base. In accordance with the new changes Decreto ley 7/2021 dated April 27, the general tax rate has been reduced and reduced to a single 7% !!!

Actos Jurídicos Documentados (Tax on stamp duty on legal acts), when it comes to the sale and purchase of real estate, then as a rule this tax comes in bulk with VAT. So, for example, if you buy a new building from a developer, in this case you pay the seller 550,000 euros (500,000 euros per apartment and 50,000 VAT), and after the transaction you submit the AJD Declaration – Stamp Tax.
According to Decreto ley 7/2021 dated April 27, the general tax rate has been reduced for Notary documents from a rate of 1.5% to 1.2% !!!
The rate cut aims to stimulate the supply of new construction at more affordable prices by reducing the fiscal costs associated with the AJD modality.

!!! And now an important nuance, the update came into force on April 28 and will be valid only until December 31, 2021.

According to the Government of Andalusia, it is necessary to continue the implementation of tax support measures aimed at mitigating the impact of the pandemic and the economic recovery of Andalusia.

If you were planning to invest in Spain, then now is the best time to do so in Andalusia. For more detailed information, you can always contact our specialists who will help you arrange everything legally correctly and quickly, and do not miss the moment!

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