IN a bid to help stimulate the economy and to generate taxable income, the Junta de Andalucia has reduced two taxes with immediate effect until the end of 2021.
First there’s the Transfer Tax which is payable whenever a ‘second hand’ property is sold which ranged from 8 per cent to 10 per cent and will now be charged at a flat rate of 7 per cent regardless of the price or make-up of the property.
Until the Decree-Law 7/2021 of 27 April came into effect, there was an 8 per cent tax on properties selling for up to €400,000, 9 per cent on the next €300,000 and 10 per cent on anything higher therefore the more expensive the property, the bigger the saving.
New builds are not included as they attract an element of IVA (VAT) and at the moment, with properties you shouldn’t be hit with two separate taxes.
The same Law also saw a reduction of Stamp Duty to 1.2 per cent from 1.5 per cent which is charged on the notarisation of any document that has an economic value and unlike Transfer Tax, a new build does require that the deed of sale be notarised and recorded in public registries.
There has been a great deal of building across Andalucia, especially on the Costa del Sol and it is hoped that these reductions will encourage the sale of properties generally throughout the autonomous community.
This information was provided by Marbella based JCA Abogados but other lawyers will also be able to advise.