The decision of the Andalusian government will have a significant impact on those who buy a home before December 31, 2021, the end date of the measure. We must consider that the Tax on Patrimonial Transmissions and Documented Legal Actions is the most outstanding tribute that buyers of second-hand property must pay.
In Andalusia, this tax levied between 8% and 10% according to the property's value. Nevertheless, since the end of April, the Tax on Patrimonial Transmissions has become a single general rate of 7%. Meanwhile, that of Documented Legal Actions, which is satisfied when formalizing the public deed of sale, goes from 1.5% to 1.2%.
The savings for those who purchase a property in Andalusia is remarkable. Until a few days ago, the buyer of a second-hand home worth €200,000 had to pay 8% for this tax, that is, €16,000. With the tax reduction, you'll save €2,000 and pay €14,000.
Those who buy more expensive homes will appreciate it much more. In the second tranche of the tax (transfers worth more than €400,000), the tax changed from 9% to 7%. So, the savings in the case of a property valued at €500,000 will be €10,000.
An incentive for buying a home in Andalusia
The objective of the Andalusian government is to stimulate the economy at this difficult time where the real estate sector has been particularly affected. By lightening the tax burden over real estate transactions, the aim is to boost both the second-hand market and the new construction one.
There will be seven months of tax relief in Andalusia, seeking to be an attractive place for property buyers and investors.
This tax discount places the Andalusian community in the group of those with lower taxes over housing purchase. While in regions such as Aragon, Asturias or Castilla-La Mancha, the tax stands between 8% and 10%, in Catalonia stands between 10% and 11%. Only in the Basque Country, Navarra, La Rioja, Madrid, the Canary Islands, and now Andalusia, the tax is 7% or below it.
However, some regions apply reduced rates in social housing to large families or low-income families, to young people or people with some disability.
Good time to invest in Andalusia
The enormous attractions of this region, now coupled with that reduction in the Tax on Patrimonial Transmissions and Documented Legal Actions, make 2021 an ideal time to invest in housing in Andalusia.
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