Arriving at the perfect time to give the Andalucian property market a boost for summer, the regional government has announced one of the first proactive measures to affect the real estate market in what feels like a very long time!
From now until the end of 2021, property purchasers in Andalucia, including the Costa del Sol and of course El Paraiso, will benefit from a flat rate transfer tax of 7%. Transfer tax, or to give it its full name of Impuesto Sobre Transmisiones, is the equivalent of a stamp duty charge and is payable on all resale properties. Prior to this announcement, purchasers were paying a tiered rate of tax on resales of 8% of the first 400.000 euros; 9% of the amount from 400.000 to 700.000 euros and 10% of any amount over 700.000 euros.
To give you an idea of how this equates to actual savings for property purchasers completing before the end of the year, we have provided examples below of how our clients are due to benefit from this change in legislation, being in a position where we have already successfully negotiated the purchase price for them, contracts have been exchanged and completion is due to take place in June or July 2021.
Two bedroom top floor apartment in Benavista – 150.000 euros:
Saving 1.500 euros in transfer tax
Three bedroom townhouse in El Paraiso Medio – 290.000 euros:
Saving 2.900 euros in transfer tax
Four bedroom townhouse in Costalita – 550.000 euros:
Saving 7.000 euros in transfer tax
Three bedroom penthouse in Paraiso Medio – 875.000 euros:
Saving 15.250 euros in transfer tax
Those purchasing a brand new property in a new development will also see some savings with their rate of transfer tax being reduced from 1.5% to 1.2%, to be paid alongside IVA (VAT).
We think you’ll agree that these figures demonstrate substantial savings at all price levels and provide a real incentive to buy your dream home or investment property in El Paraiso before the end of 2021.