In order to stimulate access to the housing market, the Andalusian government has adopted a decree to alleviate the economic crisis situation due to Covid-19.
The measures were announced by the Junta de Andalucía on 27 April and will be in force until 31 December 2021.
Below I explain the most important measures, which directly affect the purchase of a property in Andalusia.
Reduction of transfer tax
In order to promote the reactivation of the real estate sector, the Andalusian Government has decided to introduce a tax reduction in connection with the purchase of a home. By reducing the tax rate applicable to the transfer of existing homes, which has an increasing rate, depending on the value of the property that varies from 8% to € 400,000, 9% between € 400,000 and € 700,000 and 10% of € 700,000. This rate is temporarily reduced to a general and unique tax rate for all tranches of 7%.
The temporary new tax rate in Andalusia applies until 31 December 2021.
Transfer tax example:
Imagine buying a property worth 300,000 euros. With current regulations, the transfer tax would be as follows:
• 300,000 euros (house value) X 0.08% (tax rate to be applied) = 24,000 euros.
With the Decree Act coming into force until 31 December, this would look like this:
• 300,000 euros (house value X 0.07% (tax rate to be applied) = 21,000 euros. Based on the current transfer tax in Andalusia, buyers of homes would save 3,000 euros
Reduction of stamp duty (AJD, Acto Juridico Documentado)
In addition to the transfer tax, the tax rate of stamp duty has also been reduced. By stimulating the supply of new construction at more affordable prices, the general tax rate for notarial documents (Acto Juridico Documentado) is reduced from 1.5% to 1.2%. This rate is also valid until 31 December 2021.
Example stamp duty:
Imagine buying a new-build home worth 200,000 euros. To calculate what you would have to pay in stamp duty with the regulations in force so far, we would have to perform the following operation:
• 200,000 euros (value of the house) X 0.015 (tax rate to be applied) = 3,000 euros.
With the Decree Act that will be in force until 31 December, the operation to be carried out would be this:
• 200,000 euros (value of the house) X 0.012 (tax rate to be applied) = 2,400 euros.
Feel free to contact us for more information about financing your property in Spain.
Robin Christiani | Certified Mortgage Advisor in Spain and founder of De Spaanse Hypotheker
Tel: +34 675 072 836