Income Tax Deductions on Property Canary Islands

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Buying Property in Spain: Tax Deductions

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Income Tax Deductions Buying Property in the Canary Islands Anyone who is going to be dealing with property in the Canary Islands – be it to buy or rent – will be interested to know that certain tax breaks are available subject to the various qualification criteria as well as tax paid in the region.

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As is the case in general with regard to taxation matters, there is quite a wide variation in the tax breaks available, with each autonomous community applying those deductions considered to be reasonable and beneficial according to the regional government. Spanish Property Law

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The regional level exemptions available in the Canary Islands were enacted by the parliament in Santa Cruz de Tenerife with the most important provisions contained in Decreto Legislativo 1/2009. The most important deductions available are as follows:

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Deductions for Investment in the Principal Personal Residence In line with other regions in Spain, mortgage interest relief is in the process of being phases out and is only now available typically to those earning less than €24,107 Those who purchased their principal personal residence before 01 January 2011 are unaffected by the changes and may continue to benefit up to €9040 per annum

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Deductions for Investment in the Principal Personal Residence cntd... Those who have purchased a principal personal residence after 01 January 2011 must earn less than €17,707 in order to benefit fully from the deduction Those who purchased their principal personal residence after 01 January 2011 and who are earning between €17,707 and €24,107 will benefit from a sliding scale

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Deductions for Investment in the Principal Personal Residence cntd... Where the purpose of investing in the property is renovations to make it appropriate for a disabled person then a deduction of 0.75% may be applied.

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Deductions for Investment in the Principal Personal Residence cntd... Unlike most of the other regions, the Canary Islands has maintained a reduced level of deductions as follows: I) Those earning < €12000 = 1.75% II) Income > €12,000 and < €30,000 = 1.55% III) Income > €30,000 and < €60,000 = 1.15% These deductions may be applied post 2011

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For renting of the principal personal residence A taxpayer may deduct 15% of rental monies paid in respect of their principal personal residence up to a value of €500 annually on condition that: 1) They earned less than €20,000 individually or €30,000 jointly if more than one taxpayer 2) The rent paid exceeds 10% of their income that year.

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For those with variable rate mortgages Applies until 2012 and to those earning less than €30,000 individually or €43,000 jointly The deduction is expressed as a percentage and is the difference in the average rate of interest charged between the current and previous years.

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Simply put, the property transaction process in Spain is unique to this country with legal assumptions made here that just don't exist elsewhere Pitfalls Dealing with Property in Spain

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If you would be interested in a free and comprehensive guide that will help you to avoid the typical pitfalls the foreign buyers of property fall into as well as dealing with issues such as... Guide to Dealing with Property in Spain

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To find out how to deal with such issues as... Which legal checks on a property are vital to avoid any problems The step-by-step process of buying a property in Spain

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As well as... Typical ploys to watch out for to avoid being defrauded. Property taxes you pay and those you don't!

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And much more... Download the myAdvocate Spain guide to Dealing with Property in Spain by clicking on: Secrets to Dealing with Property in Spain

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More information and contact: www.myadvocatespain.com info@myadvocatespain.com Tel. +34 931 845 073