*Article by Rosana Ramírez from Alecora Tax & Legal Services
If you were thinking on buying a property in Andalusia (Costa del Sol area), we have good news for you, since 28th of April to 31st December 2021, the Andalusia Government has established a reduced transfer tax from the progressive [8%-9%- 10%] tax rate to a 7% flat rate, by the Andalusia Decree-Law 7/2021 of 27th of April.
They have also reduced the stamp duty from 1,5% to 1,2%.
These measures have been taken by the Andalusia Government to reactivate the economy in the region, and to motivate buyers to buy their dream home and real estate investors to save money.
Transfer tax is a tax that anyone who buys a property has to pay to the local Government in the moment of transferring the property from the former owner to the new one.
If you were thinking of buying a property with a sale price of 800.000€ now you will be paying €56,000; instead of paying before a transfer tax in the amount of €69,000 (8% on the amount up to 400.000, 9% on the amount between 400.000 and 700.000€ and 10% of any amount over 700.000€) so you will be saving 13,000€.
Stamp duty is a tax which affects new developments and mortgages.
If you buy a new residential development apart from the 10% VAT, the buyer has to pay stamp duty, in this case 1,2% instead of the 1,5%.
Stamp duty is also payable when a bank grants you a mortgage in Spain. A new Sentence from the Spanish High Tribunal STS N. º 35/2021, 27th January, estate that this tax must be paid by the buyer and not by the bank as in previous years.
At Alecora tax & legal services, our bilingual team of lawyers and tax advisors have more than 15 years’ experience dealing with conveyancing, taxes, visas, and advising expats and foreign clients to buy a property in Spain. Free consultation! +34 625 457 816 or firstname.lastname@example.org.