The andalucian Government has announced that it has approved a reduction in transfer tax to 7%
The regional government affirms that the new tax reform will benefit 4 million Andalusians to the sum of 329 million euros.
The Andalusian Government has approved a decree that includes a reduction in the property transfer tax (which is paid when buying a resale property, for example), so that the three rates currently set at 8%, 9% and the 10% are now replaced by a flat rate of 7%. In addition, stamp duty will also decrease slightly from from 1.5% to 1.2%.
This reduction is part of a broader tax reform that, according to the vice president of the Junta, Juan Marín, will benefit half of the Andalusian population, some 4 million taxpayers.
The new package of measures to reduce the tax burden of Andalusians will be reflected in a bill promoted in Parliament by the PP, Cuidanos and Vox, and is valued at about 329 million euros, and which includes the expansion of some existing deductions, such as those that benefit larger families, and new ones, such as the deduction for expenses in extracurricular activities related to languages and computers, and the deduction for donations to causes related to the protection of the environment. However, its application will have to wait until early 2022.
But more importantly, for a real estate blog anyway, the reduction in the transfer tax (Impuesto Sobre Transmisiones) will take effect immediately once it is published in the Official Gazette of the Junta de Andalucía (BOJA).
The Andalusian Government wants to lighten the tax burden on taxpayers and companies. And also reactivate the real estate market, by lowering the tax burden on purchases. And this will. Previously on a purchase of 150,000€ you would pay an additional 12,000€ in transfer tax. Once this new rules applies it will lower to 10,500€ a saving of 1,500€!
It also appears that the the Andalusian Government intends to lighten the tax burden on the self-employed although it has yet to be formalized.
The Junta believes this will lower the tax received by 329 millions euros but expects the lowering of the tax burden to have a positive impact on the economy several times larger, to the tune of 1 billion euros.
In fact, the regional government has a proven track record in this regard. Their first tax cuts in 2019 was approved as soon as the PP-Cs coalition took office, in 2019, far from generating a decrease in government income, led to an increase of 118,000 taxpayers in the autonomous community.
And let us not forget the huge reduction in Inheritance and Gift tax in Andalucia!
Hopefully the government will continue to make Andalucia a more attractive location to those looking at investing and/or living here.