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2019 Outlook for Andalucía

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28 Dic 2018

After 36 years in Government, the Socialist Party (PSOE) lost the majority in the Andalusian Parliament, although it technically won the election but without sufficient support from other parties to form government.

The candidates of the Conservatives Parties (PP and Ciudadanos) are already negotiating an agreement to form the new government and as a result they have prepared 52 measures to boost the region, of which we highlight the following proposals on tax reforms:

  • Keeping the tax exemption on inheritance under 1 million euro (a measure in place since January 2018 forced by Ciudadanos when supporting PSOE) and applying a 99% tax reduction to direct relatives in any case, and also to donations.
  • Reducing the regional tax scale for Wealth Tax (current top marginal rate is 3,03%) and leveling it with the state tax scale (2,50%).
  • Reducing the personal income tax scale (current top marginal rate is 46% for the band of 60.000 euros to 120.000 euros and 48% above 120.000 euros, compared to 45% above 60.000 euros for the state).
  • Reverting the increase of stamp duties made in 2012 (tax rate increased from 1,2% to current 1,5%).

Despite of the substantial reduction on inheritance and gift tax in force since January, it is still a major obstacle for people to choose living permanently in the south of Spain, so the proposed reforms that practically eliminate this tax for spouses, descendants and ascendants will be more welcome.

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