Income Tax Deductions on Property in Balearic Islands


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Buying Property in Spain : Income Tax Deductions Balearics

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Income Tax Breaks in Spain As there are 17 different autonomous communities in Spain, each with certain competency in tax matters, each region must be considered separately in order to determine what, if any tax breaks are available regarding the purchase and ownership of property.

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Each autonomous community or region may offer tax incentives relating to property in order to address what it's government consider to be a social policy priority. Spanish Property Law

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These tax incentives are in addition to those offered at a state level so – regarding any specific tax incentive - we often refer to the state 'portion' and the regional 'portion' of any tax discount.

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A tax deduction has been available for the purchase of a primary residence both at the State as well as the regional level up to 2010 though this has generally been restricted to those earning less than €24,107, with the maximum deduction of €9,040 available to those earning €17,707 or less. Purchase of the Primary Residence

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In addition to the income restrictions on those who may avail of this tax break, Article 67 LPGE/11 changes the proportional discounts available at the state and at the regional level. Purchase of the Primary Residence

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From 1 st January 2011, the State portion of the discount is 7.5% as is the regional discount (unless otherwise provided for by the regional government) making a total of a 15% discount applicable to a maximum base of €9,040. Purchase of the Primary Residence

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In the case of the Balearic Islands, Ley 1/2009 establishes the rate of tax deduction available for those property purchases where the property is the principal private residence of the purchaser deductions as being 4.5%. The total is thus 7.5% + 4.5% = 12% (for those earning less than €17,707 Purchase of the Primary Residence

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Where an investment is made to refurbish a primary residence to make it suitable for the disabled, the tax deduction at the regional level is 9.9% When added to the state portion of the discount the total discount is 20% upon a maximum base of €12,080 Refurbishment of the Primary Residence

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Any residents under the age of 36 investing in a primary personal residence (or renovating an existing property for this purpose) may take advantage of an increased discount of 6.5% up to a maximum base of €11,000. The maximum net income is set at €18,000 individually or €30,000 if a joint declaration Special Tax Breaks to Make Home Ownership Accessible to Young People

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Residents of the Balearic Islands who are: 1) under the age of 36, or 2) Disabled to a degree > 65%, or 3) Parents of Children in 'large families' may apply a discount of 15% of rental money paid up to a Renting the Primary Home

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maximum of €300 annually where various administrative rules are followed. The maximum net income is set at €18,000 individually or €30,000 if a joint declaration or in the case of large families, €24,000 individually or €36,000 where a joint declaration is made. Renting the Primary Home

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50% of the upkeep and improvement costs relating to property or land that is subject to protection orders may be discounted against income tax. The property or land should be that contemplated in Article 19.1 a, b or c of Ley 6/1999 Property or Land Specially Protected

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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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More information is available by downloading the free and comprehensive guide from myAdvocate Spain. It will help you to avoid the typical pitfalls the foreign buyers of property fall into. 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 Or for further information on the property purchase process specifically go to: Spanish property lawyers

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Always make sure to get information on a Spanish lawyer’s professional background as well as the legal fees they will charge before you commit to using their services. If you need a lawyer in Spain Consider this free service from myAdvocate Spain™: Lawyer Verification System

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More information and contact: Tel. +34 931 845 073

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