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Property Sales Tax in Andalucia, Spain

June 27, 2011 | Comments: 0 | Views: 65

The tax applicable to the sale and purchase of property in Spain varies according to the autonomous region in which the sale/purchase takes place.

In Andalucia, the regional parliament in Seville has introduced a number of different pieces of legislation throughout the years (following the derogation by central government to the autonomous communities of competence in such matters) that touch on the subject of taxation of property transfers. The process began in 2002 with the passing in to law of Ley(law) 10/2002. This has been followed by a number of amending laws introduced over the years: Ley 18/2003, Ley 3/2004, Ley 12/2006 and Ley 23/2007, Decreto Legislativo 1/2009, Decreto-Ley 1/2010, Ley 8/2010, Ley 11/2010.

So, while accepting that there are a number of different pieces of complex legislation that have varied the application of the laws on the taxation of property transfers, the general effect may be summarised as follows:

According to Ley 1/2009 the rate of tax payable on the transfer of property, as well as on the creation and assignment of rights relating to that property are set at 7%.

This has been amended somewhat by Ley 11/2010 (introducing fiscal measures to improve sustainability and reduce the public deficit)which provides as follows:

A reduced rate of tax of 3.5% shall be applied to the transfer of property, where the value of the property does not exceed €130,000 when it is purchase for the purpose of being a principal, primary residence and the purchaser is under the age of 35 or is legally classified as being disabled. In the case of the purchase of a property for such ends by a married couple or registered 'de facto' partners, at least one of the purchasers must fulfill the criteria.

Decreto-Ley 1/2010 (taxation measures to stimulate the economy of the Autonomous Community of Andalucia) provides a further amendment:

A reduced rate of 2% tax shall apply to the acquisition of a property by an individual or company that exercises a business activity which is subject to the application of the rules contained in the General Plan for Accounting in the Real Estate Sector, as long as:

a) That the property is incorporated into current assets

b) The property is sold within five years following it acquisition

Should either of these criteria fail to be fulfilled then the balance of the tax that would be payable normally i.e. without the reduction, is payable as well as legal interest on the same.

Ley 8/2010 (taxation measures to stimulate the economy of the Autonomous Community of Andalucia)provided for an additional band of taxation on transfers of property over a determined value. Specifically, the measure provides for the application of a rate of 8% taxation on property transfers that are over €400,000 in value. The measure has equal application to the creation and assignment of rights relating to property over this value. Also, the transfer of property classified as a garage (which is not attached to a dwelling up to a maximum of two) the rate of 8% applies when the value is greater than €30,000.

Related information is available at: Spanish property law

For anyone who has issues with mortgage payments in Spain: real estate lawyer in Spain

The author helps English-speakers find independent legal and tax advice in Spain with a service that ensures additional safeguards to protect their rights and their wallets.

Source: EzineArticles
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