Due to the coronavirus (COVID19) pandemic, to help promote and reinvigorate the Spanish real estate market in Andalucía, it was announced in Decree-law 7/2021, of 27 April 2021, that a rate reduction of between 1% to 3% of the transfer tax (Impuesto sobre Transmisiones Patrimoniales, commonly abbreviated to “ITP”) would be applied to all resale property purchases in Andalucía. This reduction is effective immediately and will continue through until the end of 2021.
Until last week, the transfer tax applied to the purchase of resale properties was dependent on the purchase price and was an accumulative rate of:
· 8% on the first €400,000
· 9% between €400,000 and €700,000
· 10% from €700,000 and upwards.
These rates have now been reduced to a single fixed rate of 7%.
Examples of what buyers will save depending on the purchase price:
· On a property purchased for €250,000, a saving of €2,500
· On a property purchased for €500,000, a saving of €6,000
· On a property purchased for €750,000, a saving of €11,500
· On a property purchased for €1,000,000, a saving of €19,000
· On a property purchased for €3,000,000, a saving of €79,000
With new and off plan properties in Andalucía there is a reduction in the document tax only. This reduction is from its current 1.5% down to 1.2% and will continue until the end of 2021. Whilst such properties remain subject to a 10% IVA (VAT) payment, there are many reasons as to why they remain an attractive option to buyers. With new promotions being released regularly and construction on existing developments continuing at a great speed, buyers have a fantastic selection to choose from along the entire Costa del Sol, with many developers offering excellent buying incentives to entice international buyers to secure their dream new home in the sun.
The team here have been informing buyers of the good news over the past few days, and we would be delighted to assist you, your family and your friends in purchasing property in the Costa del Sol. Contact us today and allow us to assist you in taking advantage of the tax savings before they expire.
Telephone: +34 952 527 300