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%.
It seems rather ironic that a tax which is linked with the property market should have shot up during the years when the construction industry has been at a virtual standstill, but that is the case with the ‘plusvalía’, which is a municipal capital gains tax charged on the increase in value of the land when a property changes hands. This tax has become a veritable gold mine for town halls in the province of Málaga.
The ‘Impuesto sobre el Incremento del Valor de los Terrenos de Naturaleza Urbana (IVTNU)’, to give it its proper name, is levied on the increased value of a property when it is sold, compared with its value when it was bought. When a property is sold to somebody else, the tax is paid by the vendor. If it is inherited or given as a gift, the person acquiring it pays the tax.
The campaign by the Spanish tax authorities to find all newly built structures, alterations or changes of use of properties which have not been declared to the Land Registry is starting to show results.
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