The president of the Junta, Juanma Moreno announced on September 19th, the elimination of the Wealth Tax in Andalucía, making Andalucía one of only two autonomous regions in Spain with the lowest taxes and represents one of the most positive steps possible to encourage families to buy in the region, stated PANORAMA.
The infamous Wealth Tax was actually preventing numerous individuals and families, both Spanish and foreign, from buying property and relocating to Andalucia, and its elimination will result in an immediate, significant increase in the sale of luxury properties, notably those that cost more since the Wealth Tax could be as high as several hundred thousand euros annually.
These actions are a further step in the direction of attracting new tax residents, both Spanish and foreign, establishing Andalusia’s autonomous community as one of the most attractive locations for tourists and investors, and providing a significant boost to the region’s overall economy.
Other accomplishments achieved by the current regional government include:
- The virtual removal of the Inheritance and Gift Tax with respect to spouses, children, grandkids, and parents, which has become effective on April 11, 2019. For these groups, the tax was reduced by 99% and is now only used as a “control” tax.
- The Property Transfer Tax was reduced in April 2021 from a maximum of 3% to a flat 7%, and the stamp duty was decreased from 1.5% to 1.2%. This was a short-term strategy intended to encourage and jump-start real estate transactions while offsetting the detrimental effects of Covid-19 on the real estate market. These lower tax rates were made permanent in October 2021 to 2022 and beyond, providing an incredible incentive for buyers that, in part, contributed to the market recovery in 2022.
- At the beginning of 2022, there were various tax reductions, many of which benefited young people. A noteworthy tax reduction that benefited all tax residents with high incomes was the Andalucia-related income tax cut.
- New regional legislation known as “LISTA” went into effect on December 23, 2021. The legislation accelerates the creation of new general plans by municipalities by modernizing and streamlining land use and planning permissions. This is the most important piece of legislation that has ever been passed in Andalucia regarding real estate development.
In contrast to almost all other autonomous regions in Spain, Andalucia’s regional government is not creating a tax haven—far from it—but the new tax reductions already implemented and those in the works will provide enormous benefits to all foreign residents, whether they stay for the entire year or just a portion of it.