With the real estate market offering a large stock of new products between 2019 and 2021, the Andalusian government has taken steps to support the sale of second-hand products, including the lowering of several tax breaks.
In April 2021, the region’s government gave the green light to a reduction in the property transfer tax (ITP), which applies to the purchase of second-hand homes. With this change, the overall ITP has fallen from 8% to 7%. In addition to the general rate of 7%, and since October 27, the ITP rate has been reduced in the following cases:
- Rate of 3.5% on the sale of a property up to a value of 150,000 euros if it is to be used as the purchaser’s principal residence and the purchaser is under 35 years of age, a victim of domestic violence, a victim of terrorism or acquired in a municipality with a depopulation problem;
- Rate of 3.5% on the transfer of a property whose value does not exceed 250,000 euros, when the purchaser is legally considered to be a person with a disability of 33% or more, or a member of a large family;
- Rate of 2% on the acquisition of a home for resale by a natural or legal person carrying on a professional activity to which the adaptation rules of the General Plan for the real estate sector apply;
- Rate of 2% on certain transactions involving SGRs or commercial companies of the State or the Andalusian public sector whose purpose is the provision of guarantees. Mutual guarantee companies (Sociedades de Garantía Recíproca, SGR) are non-profit financial institutions subject to supervision and inspection by the Bank of Spain.
They enable SMEs and the self-employed to access credit at more advantageous terms and interest rates, obtaining financing for their projects.
And the big news this year is a rate of 6%, one point less than the current general ITP, for transfers of principal residences worth up to 150,000 euros. In this case, the deduction is open to all citizens. The only condition is that it is a property that will be the buyer’s first residence and that its value is below the aforementioned limit. It should be remembered that the amount of ITP payable depends on the percentage applied to the sale price and the autonomous community in which the home is located, although as a general rule a rate of between 6% and 10% is applied. AJD reduction: Stamp duty tax (AJD) is also currently benefiting from the reduction applied last year.
The general rate is now 1.2%, compared with 1.5% previously. This tax is levied on notarial acts, such as the signing of the deed of sale. However, there are also exceptions where the rate is reduced:
- Rate of 0.3% on the sale of a property whose value does not exceed 150,000 euros when it is intended as the purchaser’s habitual residence and the purchaser is under 35 years of age, a victim of domestic violence, a victim of terrorism or acquired in a municipality with a depopulation problem;
- Rate of 0.1% on the sale of a property whose value does not exceed 250,000 euros, when the purchaser is legally considered to be a person with a disability of 33% or more, or a member of a large family: 0.1%;
- Rate of 0.1% for certain operations involving mutual guarantee companies or public sector companies of the State or Andalusia whose purpose is to provide guarantees.
As far as the AJD is concerned, the big news is a rate of 1% for the transfer of a property used as a principal residence, if the value of the property does not exceed 150,000 euros. The amount to be paid depends on the rate applied by each autonomous region, although none of them exceeds 1.5%. Like Andalusia, regions such as Asturias and the Balearic Islands also set an ITP of 1.2%, while the Community of Madrid applies 0.7% and the Basque Country 0.0%. On the other hand, in Galicia, Catalonia, Valencia and Murcia, 1.5% is applied.
