Andalucían Wealth Tax Liability Reduced To Zero, Providing Another Potential Reason To Buy Property In Sotogrande
Posted by Liz Seyi on January 25th, 2023
As if the exclusive development of Sotogrande wasn’t already a serious magnet for many of the most discerning property investors, the Andalucían government has now given the go-ahead for wealth tax in the region to be effectively lowered to zero.
There has been a general trajectory in recent years of the devolved government of Andalucía seeking to reduce the tax burden on those living in this highly desirable part of southern Spain.
It is unsurprising, then, that approval has now been granted for the effective abolition of wealth tax for residents of the locality. This announcement was made by the regional government on 20th September 2022, the change taking immediate effect.
With the Junta de Andalucía having also confirmed a further reduction in rates of personal income tax, these latest moves have made Southern Spain the second most attractive region of the country in which to live from a tax perspective, second only to Madrid.
But has wealth tax genuinely been abolished for those living in Andalucía?
Technically speaking, no, it has not been abolished. Autonomous communities of Spain such as Andalucía do not have the right to abolish wealth tax altogether, as tax laws in Spain are set at state level. However, the Andalucían government does have the ability to alter tax rates and allowances for people residing in this part of the country.
What the Junta did on 20th September, then, was approve a 100% relief for wealth tax, which means local residents will no longer be required to pay any wealth tax, whatever their level of wealth may be. It is the same mechanism that Madrid has long applied.
This lowering of the wealth tax rate to zero applies for the whole of the 2022 tax year, which means that those living in the autonomous community have not been liable for wealth tax since 2021.
Remember: you might still need to submit a tax return!
The fact that the wealth tax hasn’t technically been abolished is crucial to emphasise, because as a consequence of this, residents of property in Sotogrande will still need to follow the rules for the submission of an annual tax return.
For clarity on this, we would urge you to get in touch with a reputable tax advisor. But in a nutshell, if the total value of your assets and rights exceeds €2 million, you will still be required to file a tax return as an informative form. When you do, a 100% reduction will be applied, so you won’t need to worry about paying any actual tax.
With the general income tax scale rates having also been adjusted down by Juan Manuel Moreno Bonilla’s Andalucían government, you might have just been given even more reason to step up your search for property in Sotogrande.
Reach out to our own team at BM Sotogrande today, and we would be delighted to help you in the fulfilment of that aim, thereby freeing you up to start the next exciting chapter of your life.
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About the AuthorLiz Seyi
Joined: August 13th, 2019
Articles Posted: 957
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