One piece of positive news. On 21 September 2022, decree-law 7/2022, the Spanish autonomous region of Andalusia amended in the "BOJA" (Spanish Official Journal) decree-law 5/2021, of 20 October, on the allocated taxes of the autonomous region. The decree was published with a purpose of stimulating the Andalusian economy.
It includes an overall reduction of 100% of the taxable base for wealth tax, or in other words, that your property will not be taxed with this tax in the future.
Although foreign buyers of luxury property in Andalusia mainly do it for the climate and the lifestyle, the actual abolition of the wealth tax, could well be an additional stimulus.
With this decree, the Andalusian government approves a series of orders. Among these:
Personal wealth tax (to be filed by both taxpayers in Spain and those who are not) : A reduction of 100% of the rate resulting from the settlement is applied. This means that tax filing remains mandatory, but the result payable is zero.
There was already an exemption for the first €700,000 of assets and the higher portion was taxed in stages.
Individual Income Tax (applicable only to persons who are tax residents):
- The Andalusian rate applicable to the tax base is adapted in order to achieve a reduction in the amount resulting from the settlement of this tax.
- The regional personal and family minimums applicable to the tax are increased, which also results in a reduction in the amount to be paid for said resulting tax.