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The Andalusian Government has approved a decree law that reduction the general rate of the Tax on Property Transfers and Documented Legal Acts (ITPAJD), in order to promote the economic reactivation of Andalusia. The decree law will come into force the day after its publication in the Official Bulletin of the Andalusian Government (BOJA).
The measure consists of the reduction of the general tax rate applicable to the property transfers (Tax on Property Transfers) and the constitution and transfer of real rights over them, except for guarantees, changing from the current rates of 8%, 9%, and 10% to a single general rate of 7%. Likewise, the general tax rate for notarial documents is reduced (Documented Legal Acts) from 1.5% to 1,2%.
Thus, in the case of a transfer of a property valued at 180,000 euros between two individuals, with the existing regulations before the entry into force of this decree law, the taxable base was multiplied by the rate of 8% of the first tranche of the tariff (which applies up to 400,000 euros), resulting in a tax fee of 14,400 euros. Following the publication of the decree law, the resulting tax fee is 12,600 euros after applying a general rate of 7%. The savings produced is, therefore, 1,800 euros.
In the case of a transfer between individuals of a garage space worth 24,000 euros, until now the tax fee to be paid was 1,920 euros (rate of 8%), however, with the new rate of 7%, the resulting fee is 1,680 euros, which means the savings is 240 euros.
On the other hand, the public deed through which the transfer of a new home valued at 200,000 euros from a promoting company would be taxed under the current regulations (Legislative Decree 1/2018) at a general rate of 1.5%, resulting in a tax payment of 3,000 euros. With the reduction to a general rate of 1.2%, the tax payment is 2,400 euros, representing a saving of 600 euros.
The president of the Andalusian Government, Juanma Moreno has also announced an extension of deadlines for the presentation and payment of the Inheritance and Donations Tax and the self-assessment of the Tax on Property Transfers and Documented Legal Acts. "This new tax reform will be a fundamental pillar in the cohesion of Andalusia and will join the roadmap outlined with our policies, which promote our productive sectors", has stated the President of the Junta de Andalucía.
In the session of control to the Andalusian Government, he indicated that this new tax reduction, which seeks to alleviate the tax burden at a critical moment due to the pandemic, will mean 329 million euros in the pockets of more than four million Andalusians "from middle and working classes".
The indicated measures will be in effect from the day after their publication in BOJA until December 31, 2021, pursues a double objective. On one hand, to boost the reactivation of the real estate sector, through a reduction in the taxation linked to the acquisition of second-hand homes; on the other, to incentivize the supply of new construction at more affordable prices, by reducing the tax costs levied by the AJD modality. Ultimately, the ultimate goal is to relieve the tax burden in accessing housing.
