Costa del Sol properties free of Wealth Tax
· 3 min. read
From 2023 this tax will no longer be levied on property owners, whether they are residents or non-residents in Andalusia.
The Wealth Tax has been suspended from the end of September 2022 by the Governing Council of the Junta de Andalucía. The new reform of the law will apply from 2023 for both Spanish and foreign residents. It will also cover non-habitual residents who own property in Andalusia. This last aspect affects many property owners in La Costa del Sol who have a second home in the area but use it for less than 180 days a year.
The measure has both detractors and supporters
The measure has been widely welcomed by business owners, property owners and potential investors, especially those with high value or ‘luxury’ properties. This decision represents a major saving in terms of tax payments that will now be left in the taxpayers’ pockets.
However, the abolition of the tax has not been without controversy. Its implementation will result in a loss of millions in revenue for the regional treasury. For this reason, members of the opposition as well as the state government, both of a different political persuasion, have strongly criticised it.
A tax reform that has already been done in Madrid
The regional government in southern Spain has carried out this tax reform following in the footsteps of the Madrid regional government. Precisely, Madrid’s cancellation of this tax had already generated a lot of discontent in other areas of Spain because they considered that they were at a disadvantage. The law involves a modification that each community has the power to make and which makes a decision between more tax-raising policies or more free-market policies.
The president of the Junta de Andalucía, Juanma Moreno, has defended this tax reduction measure on the understanding that, although this tax will no longer raise a certain amount of money for the public body, it will be a magnificent boost for property investment in Andalusia. Thus, in his opinion, the Andalusian territory is now much more attractive when buying or selling a property than other areas of Spain.
The villas and apartments of the Costa del Sol are also in luck
The abolition of Wealth Tax also has a direct effect on real estate in the Costa del Sol. Apartments, villas, mansions, plots of land or similar, with a luxury profile, purchased in Andalusia, and therefore the southern coast of Andalusia are in luck.
From 2023 this tax will not be applied, which means a saving of between 0.22% and 2.76% depending on the value of the property. For example, with a wealth of one million euros, the saving would be ten thousand euros (1%) according to the previous tax table. For more detailed and official information you can consult the website of the Junta de Andalucía on the Wealth Tax.
The legal and financial experts at Christie’s International Real Estate – Malaga & Marbella will be able to advise you on these new tax advantages when buying and selling your property. Please do not hesitate to contact us.