Below is an article about general changes in tax laws in Spain, and at the bottom of the article you will find tax laws and tax rates specifically related to Andalusia as this is the area of greatest interest to international and Swedish investors.
So what are the new benefits of living in Andalusia now?
- Maximum income tax of 26% for investment income. Tax rates range between 19% and 23% unless investment profits exceed €200,000.
- Expanded deductions for rental income. Income is calculated after deducting all related expenses, including interest expenses on loans.
- Almost no inheritance tax and gift tax for close family members.
- People who permanently move to Spain from other countries can completely eliminate inheritance tax and gift tax.
- Private pensions are now considered investment income, with the taxable amount calculated based on the difference between the amount invested and the income withdrawn. Here, taxes can be as low as 2.5%.
- A full range of international tax treaties that ensure that double taxation almost never occurs.
- No wealth tax!
General changes in tax laws Spain 2023
- The general corporate tax rate is 25%, but special rates may apply in certain cases (e.g. banks are subject to a 30% tax rate, start-ups may in some cases be subject to a 15% tax rate, etc.).
- A new alternative minimum tax applies to taxpayers who had a net turnover of at least EUR 20 million in the previous year or who are part of a consolidated tax group.
- A new tax for high net worth will be applied in 2023 and 2024 and will consist of three bands: between €3 and €5 million in net worth, 1.7%; between €5 and €10 million, 2.1%; and above €10 million, 3.5%.
- Capital income and capital gains will be taxed more in the income tax from €200,000 by one point, to 27%, and for capital gains over €300,000 it will be raised to 28%, two points more.
- The limit for exemption from income tax has been expanded and a tax reduction for small and medium-sized enterprises has been approved.
- The regional deduction for investments in first homes has been increased to five percent for both young people and owners of officially protected homes.
- Rent deductions have been improved for various groups, including people with disabilities, those over 65, and victims of domestic violence or terrorism.
- Deductions of up to €200 can be made for births and adoptions.
- Two new exemptions have been created – one to compensate for educational costs with a limit of €150 per student and another for donations that have an environmental purpose.
New tax laws and rates specific to Andalusia
The tax changes below could result in significant savings for foreign buyers, especially for higher value properties.
- In addition to these tax cuts, Andalusia also offers lower income tax, wealth tax, and inheritance and gift tax than most other regions in Spain.
The income tax rate will be reduced to the lowest level of 9.5 percent, the minimum required by Spanish law. - As previously mentioned, the wealth tax (Impuesto Sobre el Patrimonio (IP)) is abolished completely.
- Tax rates for inheritances and gifts have been reduced to between 7 and 26 percentAccording to the Andalusian government's calculations, this means that the marginal tax rate will not exceed 45 percent. Until now, it could reach 70 percent.
- Property transfer or transfer tax will remain at the current low level of 7%, while notarial deeds will continue to be taxed at the current level of 1.2%.
- The Property Transaction Tax (PTT) has been reduced from a scale of 8% to 10% to a flat rate of 7% for all sales prices. This applies to resale properties only.
- Stamp duty (AJD) has been reduced from 1.5% to 1.2% for all sales prices. This only applies to newly built properties. These tax reductions were initially valid until 31 December 2022 but have been extended indefinitely.
Note. Be aware that these laws and regulations are constantly changing. It is important to consult an authorized tax advisor or expert who is familiar with both Spanish and Swedish tax laws to ensure full compliance and optimize your tax situation.
Read also:
Everything you need to know about investing in Spain
About the Spanish housing market (continuously updated with new figures)
Frequently asked questions and answers related to buying a home in Spain
Sources:
Spain: Tax measures in 2023 budget law – KPMG United States
Spain tax changes 2022-2023: less income tax for low earners and new taxes for the rich — idealista
Understanding the New Tax Laws in Andalusia in 2022 | Right Casa Estates
The new tax laws in Spain's Andalusia in 2022: What you need to know – The Local
The new tax laws in Spain's Andalusia in 2022: What you need to know | The Local
Spain Highlights 2022 – Deloitte
Wealth tax scrapped in Andalucía – Mpdunne
