Wealth tax scrapped in Andalucía
Within Spain’s federal system, the different regional governments enjoy a high degree of autonomy, something that Andalucía’s new centre-right government has taken full advantage of by slashing taxes.
After many years of socialist-led high taxation, Andalucía is fast becoming one of the regions with the lowest tax rates in all of Spain. In fact, only Madrid now has lower taxes than Andalucía, since regional president Juanma Moreno abolished wealth tax in September. His PP (Partido Popular) party has also promised to lower other earned and general income taxes, and we’re inclined to believe them, since so far they have lived up to their campaign promises.
The reasoning behind these moves is to attract investment, business development and in so doing stimulate the economy. As a result the region is becoming increasingly more attractive to investors, entrepreneurs, affluent homebuyers and residents, particularly in locations such as Marbella, where inheritance and wealth taxes are now removed as stumbling blocks to enjoying one of the best lifestyles available in Europe.
A series of taxes lowered
Wealth tax isn’t the only one scrapped, as inheritance tax is all but gone for close family members, and both Capital Gains Tax and that on investment income ranging between 19% and 26% – the latter applicable to earnings above €200.000. What’s more, expenses, including interest on loans, can be subtracted from rental income, while private pensions are now regarded as the income from investment, with the taxable figure derived at by the difference between the sum invested and the earnings withdrawn. Here taxes can be as low as 2,5%, making Andalucía now one of the most attractive lifestyle destinations in Europe, and in many cases more fiscally appealing than the UK.
If Marbella and the Costa del Sol were popular before, the new tax reductions are set to make it even more so, with favourable financial conditions being added to one of the most appealing lifestyles anywhere in Europe. Get in touch with our team for more detailed information.