Property Tax relief in Andalucía until end of 2021
As of today 29th April 2021 the rates of ITP have been reduced in Andalucía. Bottom line you will pay less property tax when you buy a resale property between now and the end of the year.
So, what is ITP? Resale properties are not charged VAT when sold, that applies only to the first time a new property is sold. The second and subsequent sale of a property has a levy called ITP “Impuesto sobre Transmisiones Patrimoniales”, which is a transfer Tax. Each autonomous community in Spain has the autonomy to set its own tax levels.
On the 29th April Andalusia reduced its ITP rates, from the previous 8% on the first 400,000€, 9% on the following 300,000€ and 10% to anything over 700,000€, to a flat rate of 7% for all resale properties values. Meaning that now, buyers would be paying less taxes for a second home. This is valid until 31st December 2021.
The following table shows the ITP rates for Andalucía (2020), before and after 29th April using an example of a property to be sold for € 1,800,000.
New rate will be 7% of € 1,800,000 = € 126,000
Previously it would have been:
€ 400,000 @ 8% = € 32,000
€ 300,000 @ 9%. = € 27,000
€ 1,100,000 @ 10% = € 110,000
Total: € 169,000
Saving € 43,000
The reason this has been done is to firstly, to promote and reactivate the real estate sector seriously affected by the crisis, and secondly to considerably alleviate the fiscal burden on buyers who have suffered the most severe effects of the economic crisis derived from the pandemic.
For further details, please contact me directly, Charles Gubbins.
✉ charles.gubbins@noll-sotogrande.com
? +34 607 911 661
