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Andalucia Tax Cuts

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26 Apr 2019

As expected, the new Government of Andalucía approved Decree-Law 1/2019 with effect as from 11 April, increasing the tax allowances and reducing the tax scales on taxes shifted or shared with regional governments.

Inheritance and Gift Tax

Spouses and close relatives continue to benefit from 1.000.000 euros free of taxes as in 2018 with the additional benefit of 99% reduction on the tax liability, and this applies to inheritance and gifts as well. Therefore, heirs or receivers will discount 1 million from the taxable base, and the tax liability arising from the tax scale will be reduced by 99%, which practically means the elimination of this tax for close relatives, becoming the region of lowest taxation in Spain.

Registered unmarried partners and fostering are put on an equal footing.

Personal Income Tax

PIT has got two taxable bases, one for passive income taxed at 23% maximum and one for standard income. The taxable base for standard income is shared with regional governments. Current top marginal rate for someone residing in Andalucía is 47% above 120.000 euros, and it has been agreed a progressive reduction from 2019 to 2022, to reach the top marginal rate of 45% above 60.000 euros in 2023.

Transfer Tax and Stamp Duties

Transfer tax rate for the acquisition of property to be the habitual abode for large families is reduced to 3,5% and Stamp Duties is just 0,1% for the title deeds, provided that the value of the house is under 180.000 euros. The same applies to buyers under 35 for properties of less than 130.000 euros.

Stamp Duties will fall from 2% to 1,5% for the purchase of real estate properties when resigning to VAT exemption.

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