Tax goes up… but not for second hand homes!

What fun. Here’s an interesting fact that escaped my notice (what with the foxes and all).

IVA medium rate goes up tomorrow (1st July 2010) to 8% – meaning if you buy a new house tomorrow, costing 200,000€, it will cost you 2,000€ more in tax than it would have today (7% IVA rising to 8% IVA). IVA is only applied to new homes, right?

But, Andalucia has said that the Impuesto sobre transmisiones patrimoniales, which is the tax that is applied instead of IVA on the sale of second hand homes, will stay at 7% instead of rising to 8% (on all homes costing under 400,000€).

The ITP is a community tax applied by the regions, so for example Extremadura has done the same thing (up to 300,000€), Galicia I believe is sticking at 6% and most other regions are increasing the tax to 8% to be in line with the IVA rise, as the central government has recommended.

So it’s now cheaper to buy a second hand home in Andalucia than the equivalent new one – by at least 1%.

Actos notariales remains the same (in Andalucia). Rule of thumb – look at the house price and add 10% for the taxes (11% if it’s a new home!).

Seems the most expensive region in Spain for tax on second hand homes is now Catalunya – the cheapest, the Canary Islands (6,5% ITP, although no IVA is charged on new homes, so it’s the other way around there).

One Reply to “Tax goes up… but not for second hand homes!”

  1. Terrific work! This is the type of information that should be shared around the web. Shame on the search engines for not positioning this post higher!

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