ATTENTION!!! According to Law 5/2021, of October 20, on Assigned Taxes of the Autonomous Community of Andalusia, the Property Transfer Tax (ITP) is maintained at 7% and Tax on Documented Legal Acts (ADJ) at 1.2% after from 12.31.2021.
The ideal moment to invest into real estate is this year.
Tax reduccion in Andalusia.
Property Transfer Tax and the Documented Legal Acts Tax reduction.
At the time of real estate purchase we all have to pay the Property Transfer Tax. This tax can involve a very large outlay for the client and even make him choose another property considering the total price of acquisition .
As a general rule, the Property Transfer Tax in Andalusia amounted to the following values:
– For any property whose value does not exceed 400,000 euros – 8%
– For properties whose value is between 400,000 and 700,000 euros – 9%
– For properties whose value exceeds 700,000 euros – 10%
Faced with the crisis situation caused by the coronavirus pandemic, the administration decided to introduce changes, in order to reactivate the economy and promote operations in the Andalusian real estate market, reducing the Property Transfer Tax (PTT) and Documented Legal Acts Tax (DLAT) rates.
According to Decree-Law 7/2021, of April 27, on reduction of the tax on Patrimonial Transmissions and Documented Legal Acts, the rates for Patrimonial Transmissions are reduced from those previously described to a single tranche of the 7% tax on the purchase value.
In this way, homes with a value greater than 700,000 euros will have a 3% savings in this tax, for example, in the case of buying a property of 1,000,000 euros, this means a saving of 30,000 euros.
This reduction will be in force between 04/28/2021 and 12/31/2021, so that as of January 1, 2022 the tax will return to its usual rates.
The Tax on Documented Legal Acts during the same period, described above, will have a general applicable rate of 1.2% compared to the 1.5% of the usual rate in Andalusia. With the same example of a home purchased for 1,000,000 euros, the savings amount to 3,000 euros, which together with the savings in ITP would sum up a total of 33,000 euros less expenses.
Taking into account the terms of the reduction, our professional team considers it very beneficial for our clients to think about the purchase of a property in 2021, since from January the acquisition only due to the effect of taxes will increase between 1% and 3.3% .
“Taking into account the terms of the reduction, our professional team considers it very beneficial for our clients to think about the purchase of a property in 2021, since from January the acquisition only due to the effect of taxes will increase between 1% and 3.3% .”
Contact us for a rigorous processing of your purchase, taking advantage of the tax discount and the optimal time to invest.
AJ Forsman Abogados