22/09/2022
Bellingtons Property Group explains a move that will make Andalusia one of the most attractive regions in Spain, as Juanma Moreno, the president of the Andalucían government has announced that it will today abolish wealth tax.
One of the central policies of the centre right Partido Popular is the traditional conservative view that taxes should be as low as possible and that citizens should be trusted to spend their own money as they do so more sensibly than the government.
It all started on 5 April 2019 when the PP finally got into government after 40 years of socialist rule and they started on their tax reform programme by virtually eliminating inheritance and gift taxes between spouses and direct family members.
By announcing with immediate effect the abolishment of wealth tax, Andalucía will become the region with the lowest taxes after Madrid.
The new 100% exemption of wealth tax is justified with the complete logic that this abusive tax does not stimulate the growth of the economy and in any case, the tax collected is only 0.6% (96€M per year) of the budget of Andalucía. Juanma Moreno pointed out that suppressing wealth tax will easily be recovered as it will have a very positive impact on the attraction of people to live in the region with their capital and income tax payments .
Literally, thousands of high net worth individuals, investors and businesses will be attracted to establish their permanent residence here, with their contributions stimulating the growth of the economy, jobs, better public services and security for its residents.
Here are the advantages of living in Andalucía:
• Virtually nil inheritance and gift tax for close family. Residents of countries such as the UK take note that moving to Spain can eliminate inheritance and gist tax permanently, if matters are properly organised.
• Maximum investment income tax of 26%. In fact, the rates are between 19% and 26% with the top rate only applying on income over 200,000€.
• Capital gains tax rates of 19%-26%. Same as investment income.
• Buy to let residential letting net income taxed at an effective maximum tax rate of 20%.
• Letting income is calculated after deducting all related expenses, including loan interest. UK residents take note that Spanish income tax is effectively lower than the UK on buy to let income.
We know from previous discussions with many individuals wishing to move Spain, that decided they couldn’t because of wealth tax. So, getting rid of this tax will be a true game changer, especially when combined with near exemption from inheritance tax and the relatively attractive income tax regimes.
We also predict that most of those who decided on basing themselves in other countries like Portugal will now change their minds and move to Andalucía full time. Many people who opted for residence in Madrid will now rethink their situation and move to one of the best areas of Spain, with all the benefits of the sea, mountains and inland beauty of Andalucia.
