Great news for property buyers! Lower property transfer tax for 2021! The ITP is now 7%!

Lower property transfer tax Andalusia 2021. The Junta de Andalucia is as of today, the 28^th of April 2021, lowering the ITP tax (impuesto de transmisiones patrimoniales). ITP is the tax paid by the buyer at a property purchase to 7%. Until now the ITP was paid according to a sliding scale from 8-10% depending on the price of the property. The good news is that the tax goes down for all, and it will be especially beneficial for property transactions over 700.000 Euros where the ITP was 10% before.

Big tax savings!

So for example, if you are buying a property for 1.000.000, from now on you will pay 7% transfer tax (ITP) on the whole amount, 70.000€. Before you had to pay 8% on the amount up to 400.000, 9% on the amount between 400.000 and 700.000€ and 10% of any amount over 700.000€. Totalling 89.000€ so there is a direct saving of 19.000€! If the purchase is, for example 1.500.000€ the saving would be 34.000€!!

But the saving for a lower price property is not insignificant either; a property sold for 200.000€ would have paid 8%= 16.000€ before and will now have to pay 14.000€, so 2.000€ less tax to pay! So the lower property transfer tax Andalusia 2021 is good new for all buyers!

This piece of news is definitely set to boost the property transactions in Andalusia in 2021, which has already started very strong!

Also for New developments? not so much but some…

So what about new build property? The ITP is only paid on resale property. While new development pays 10% VAT and Stamp Duty (AJD). The VAT (IVA in Spain) is not depending on the Junta de Andalucia (the Andalusian government) but on the Central Government. So there is not any reduction there I am afraid! New build will still pay 10% VAT. BUT the Stamp Duty is being lowered from 1,5% to 1,2%. So there is at least a small piece of good news for buyers who are completing on new developments in Andalusia in 2021!

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