As in Belgium, Spain has a number of economic support measures against the corona crisis. Taxes are going down across Andalusia, including the popular regions of Costa del Sol and Almeria.
Since the end of April, there is now also a temporary measure for property investments. As a result, you will pay less taxes when buying property this year.
Update: 01/11/2021: The measures will remain in force beyond 31 December 2021 for an indefinite period.
What does the favour measure entail?
The selling rights (ITP) will be reduced from a progressive rate of 8 - 10% to a flat rate of 7%. The stamp duty (AJD) falls from 1.5% to 1.2%. These reductions will in principle apply to deeds until 31 December 2021.
Find out more about purchase costs in Andalusia here.
What are the conditions for reduced taxes in Andalusia?
There are no special conditions. Across the autonomous region of Andalusia, the reduction applies as long as you buy this year.
What are the tangible savings?
In case you invest in a new home you pay 10% VAT on the purchase price. In addition, there is a stamp duty of normally 1.5% on the purchase price excluding VAT. This stamp duty is now temporarily reduced to 1.2%.
An example: You have your eye on a finished new-build property worth 280,000 euros. Normally, the transaction taxes are 28,000 euros VAT and 4,200 euros stamp duty. The total tax is then 32,200 euros. This year, however, you will owe 3,360 euros in stamp duty. The total tax is then 31,360 euros. A saving of 840 euros.
However, when you invest in a resale, the savings are significant. Andalusia normally applies progressive rates of 8% up to 400,000 euros, 9% from 400,000.01 - 700,000 euros and 10% for purchases above 700,000.01 euros. Currently, however, this is a flat rate of 7%.
An example: you buy a property in resale for 280,000 euros. In ordinary times, the selling right is then 22,400 euro. This year, the selling right is 19,600 euros. A saving of 1% or 2,800 euros.
However, if you buy a €800,000 home, the tax comes to €69,000. This year, it is only €56,000 or a saving of €13,000.
For those who already have their eye on a property, now is the time. After all, several months elapse between reservation and deed.
