Majorca Property News

50% tax savings on real estate in Mallorca

50% tax savings on properties purchased in 2012 and the increase in property transfer tax was partially withdrawn.

The taxation of benefit from an estate sale is drastically reduced. This is only for those buyers who purchase from now until the end of 2012 a property, whether house, apartment, office, warehouse, garage or similar. Is that the case, must at some point in a later sale, only 50% of the profits to tax? This benefit applies to private individuals and for companies, residents and non-residents and has been with the Royal Decree-Law 18/2012 from 11.05. The purchasing Parts may not be related by kinship or economically with each other.

But (Impuesto sobre Transmisiones Patrimoniales; ITP) but also at the just changed (increased) real estate transfer tax, s was partially withdrawn. Although this is the result pleasing, but the calculation of the tax in a particular case shall be made in future without a calculator is no longer the tax rates are sliding, with the result so that, unlike in the past is not a fixed rate (7%) is applied to the purchase price .

The end of April was published modification of the innovation, as expressed by the Prime Minister Bauza, because the public administration, at any time could change the law if it factual, textual or computational errors (errores materials, de hecho, arithmetic’s o) would have been. At least now the whole thing is a bit cheaper: 

Now is the current table is as follows:

7% up to 300.000 €

Maximum tax:  21.000 €

300.000.01 € to 500.000 € 8%

Maximum tax:  37.000 €

500.000.01 € to 700.000 € 9%

Maximum tax: 55.000 €

Over 700.000 € 10%

New is, therefore, that the newly introduced price levels no longer be defined as a percentage, but with a fixed amount. Anyone who buys a property for 500,000 € not pay about 8% real estate transfer tax (i.e. € 40,000) but "only" € 37,000. Even greater is the saving for a purchase price of 700,000 €, where the control of 63,000 € (which would have corresponded to 9%) has now been set at € 55,000 linear. Overlying each share purchase price is then calculated using the rate listed in the table above. 

Sample Calculation for a purchase price of 1,000,000 € is the value to 700,000 € the (new) fixed amount of 55,000 €, for another 300.000 € then 10%, therefore € 30,000, thus bringing the total tax due in this case 85.000 €.