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PAG 02 a 13 ADS 50.qxp_Layout 1 30/5/21 23:47 Página 10<br />
TAXES<br />
REDUCED<br />
IN ANDALUCIA<br />
by Francisco Sánchez<br />
Good news for real estate investors in Andalucía. Its government has agreed to reduce several taxes. The ones<br />
related to Real Estate purchase have been significantly reduced as we explain in this article.<br />
The government is aiming to attract investors and energize the real estate market by reducing the fess associated<br />
with the purchase of a property. Time will tell whether the measures are successful or not, but for the moment, it<br />
has been welcomed by all the parties that directly or indirectly intervene in Real Estate transactions (agencies,<br />
notaries, lawyers, etc).<br />
These incentives aim to encourage and stimulate a key sector in Andalusian economy. Despite<br />
the fact that the Real Estate market in the Costa del Sol is holding up and prices have even increased, other parts<br />
of the region have suffered the struggle of the Covid-19 pandemic, which final effects are still to be evaluated.<br />
Therefore, the government approved the Decree law 7/<strong>2021</strong> of 27th April.<br />
Two of the taxes directly linked to real estate that have been reduced are:<br />
1.- Impuesto de Transmisiones Patrimoniales / Property transfer tax (ITP).<br />
This tax is to be paid by the buyer on the purchase of second-hand properties (resale properties) preceding to the<br />
land registry inscription.<br />
Prior to the above-mentioned Decree, this tax was calculated in an ascending scale that started at 8% and went up to 10%<br />
of the sale value (8% from 1.-€ until 400.000.-€; 9% from 400.001.-€ until 700.000.-€: and 10% from 700.000.-€ on).<br />
After April 28th <strong>2021</strong>, a unique tax rate of 7% applies regardless of the purchase price.<br />
2.- Impuesto de Actos Jurídicos Documentados / Stamp duty (IAJD).<br />
Stamp Duty is to be paid to any purchase subject to the payment of VAT (off-plan property bought from a promoter<br />
or building plots, for example).<br />
In this case, the Stamp Duty has been reduced from 1.5% down to 1.2% of the purchase price.<br />
Both reductions translate into a substantial tax saving for property buyers in Andalusia.<br />
For example, in a 1 million Euros resale property purchase, the buyer will now pay 70.000.-€ whilst he/she would<br />
have paid 89.000.-€ just a month ago.<br />
Nevertheless, bear in mind that the measure is temporary, and it will only last until the end of this year: it will be<br />
in force from April 28th <strong>2021</strong> until December 31st <strong>2021</strong>.<br />
Had you considered to purchase a property in Andalucia but not decided yet, this may be the boost you have been<br />
wating for.<br />
We hope this summary has been helpful. SANCHEZ & BECK ABOGADOS is a law firm that specialises in all kinds of<br />
court proceedings of civil, criminal, administrative, company and real estate nature as well as in delivery of legal<br />
opinions, advice, legal reports and intervention in sale/purchase operations and other contracts.