Dear Sirs,
I have some savings and I understand that is a good time to buy new properties and homes in Spain, as it seems there are many legal and tax advantages, and also I have been told that if part of the money is paid in cash, I will pay less taxes. Is this true?.
Dear Reader,
Thanks for your mail.
In the last months, we have received many inquiries in this regard. They come from clients already living in Spain with a Spanish property who want to take advantage of market opportunities, and also from new clients who want to buy in Spain for first time.
And yes, it is true that right now there are important advantages when buying a new property or house. But before analysing those advantages, about the cash payment you mentioned, there are some points we would like to clarify:
• Following the recent Act Law 7/2012 of 29th October, regarding tax fraud’s prevention, it is prohibited to pay € 2,500 or more in cash. This limit is a bit higher when the payer is an individual and proves that they are not tax resident in Spain, etc.
• In any case, you should know that even if you could pay in cash, which is not possible anyway as said, the whole price paid must declared on the Purchase Title Deed or Escritura.
Regarding your query about the tax benefits, as included in an article on La Verdad de Murcia, if you are thinking of buying a new property in Spain, you should be aware that, due to the current circumstances and tax advantages, buying a new property now in 2012 is much cheaper from the fiscal and tax point of view, than buying in 2013.
The main difference is that now IVA (VAT) tax on a purchase of new properties and homes, is paid at 4%. But from the first of January 2013, this tax will be increased to 10% VAT. If you make a down payment within the year 2012, that part of the price will be taxed at 4%.
Also it is expected that the Income Tax Deduction for main home purchase will be eliminated next year.
Also it seems that urban properties purchased between 12th May and 31 of December 2012 will have an exemption of 50% on the Gain obtained, when selling in the future in certain cases.
For all these reasons, we can confirm that if you are thinking of buying a new property in Spain, it seems more than appropriate to try to buy it or start the process within the remainder of the year, if possible.
If you or someone you know is going through a similar situation then please do not hesitate to contact us, we will be more than pleased to assist you.
The information provided in this article is not intended to be legal advice, but merely conveys general information related to legal issues.
White & Baos
Tel:+34 966 426 185
E-mail: info@white-baos.com
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