Income Tax Deductions on Property Andalucia

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Buying Property in Spain: Tax Deductions

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Analysis Income Tax Deduction Buying Property in Andalucia For anybody living in the Cantabria region of Spain and therefore who is subject to income tax the fact that a number of tax-breaks exist in relation to property dealings will no doubt be of interest.

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For many years now each of the Autonomous Communities have had authority vested in them to set local tax rates and, importantly, local tax exemptions and deductions in order to promote those activities they considered beneficial. Spanish Property Law

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All tax laws in Andalucia are encacted by the parliament in Seville with the most important provisions contained in Ley 11/2010 The most important deductions available are as follows:

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Purchase/Renovation of Assisted Housing Those taxpayers who are eligible for public subsidies for the purchase or renovation of their permanent private residence benefit from a deduction of €30 in the tax year in which they received the subsidy

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Purchase/Renovation of Assisted Housing A deduction of 2% of the cost of purchasing or renovating a property that is designated as subsidised housing where it is going to be the permanent private residence of the taxpayer, where:

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Purchase/Renovation of Assisted Housing 1) The property is correctly classified as subsidised under the relevant statutory authority 2) The property was acquired or renovated after 2002 3) The income of the tax payer's family unit are not more than 5.5 x IPREM (for 2011 set at €6,390

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Purchase/Renovation of Housing by the Young A deduction of 3% of the cost of purchasing or renovating a property that is going to be the permanent private residence of the taxpayer, where:

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Purchase/Renovation of Assisted Housing 1) The tax payer is under 35 years of age at the time the liability to pay the tax arose (e.g. when the property is purchased) 2) The taxable income of the purchaser is not over €19,000 is taxed individually or €24,000 if taxed jointly. 3) The purchase (or renovation) should have taken place after 2002

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Purchase of Principal Personal Residence The foregoing deuctions aside, where the tax payer purchases their principal personal residence then in line with most other regions, this is no longer tax deductible for those who earn more than €24,107 and rises to 15% with a limit at €9,040 for those earning €17,707 or less.

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For renting of the principal personal residence Those under the age of 35 may deduct 15% up to a maximum of 500€ annually for the rental of their primary personal residence where:

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For renting of the principal personal residence 1) The taxable income of the purchaser is not over €19,000 is taxed individually or €24,000 if taxed jointly 2) The deposit must be lodged with the financial institution as referred to under Art 36 Ley 29/1994 de Arrendamientos Urbanos

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For renting of the principal personal residence 3) The landlord is identified in the subsequent tax return made by the tenant (their NIF) 4) That in the same tax year the taxpayer does not apply any relief for investment in a principal private residence, except for the special 'home investment bank accounts'

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For renting of the principal personal residence 5) Should the tax return be a joint return at least one of the taxpayers should be comply with the age requirements

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Simply put, property transactions 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 Or for further information on the property purchase process specifically go to: Real estate lawyer Spain

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If you need legal advice in Spain but are concerned about dealing with lawyers about which you have little or no background information, then get peace of mind at no additional cost by using the: 'Look before you leap' Lawyer Verification System myAdvocate Spain™

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More information and contact details: www.myadvocatespain.com [email protected] Tel. +34 931 845 073

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