Fiscal novelties of Law 5/2021 of Andalusia. Tax on Property Transfer and Stamp Duty (ITP-AJD)

Fiscal novelties of Law 5/2021 of Andalusia. Tax on Property Transfer and Stamp Duty (ITP-AJD)

Last 20th October 2021, the new law on assigned taxes in Andalusia was published, which regulates all the changes made by the Autonomous Community of Andalusia. This law included several important changes that deserve to be highlighted, especially because most of them come into force on 1 January 2022, however, some of them came into force from the day after the publication of this law.

In this article we will focus on the:

TRANSFER TAX AND STAMP DUTY (HEREINAFTER, ITP-AJD).

1. Rate applicable to immovable property

The rate applicable to the transfer of real estate is reduced to 7% as a fixed rate, without brackets or time limit. Until now we had brackets of 8, 9 and 10% for amounts of up to 400,000, 700,000 euros and subsequent amounts, although a temporary reduction to 7% had been approved until 31 December due to the COVID crisis, which is now approved as a fixed rate and without limit, i.e. 7% will continue to apply after that date.

This amendment came into force from the day after its publication on 20 October 2021.

2. Applicable rate for leases

The rate applicable to leases, which until now depended on the amount of the lease, has been reduced to a fixed rate of 0.3%. As this is a tax that in practice hardly anyone pays, it is important to point this out, as it could be linked to the application of the regional deduction in the IRPF for the payment of rent for those who live in their habitual residence in this way.

In the case of property rentals, it will not be necessary to present, together with the self-assessment of the tax, a copy of the rental contract, as long as it has been presented to the Administration on the occasion of the deposit of the deposit established in article 36 of Law 29/1994, of 24 November, on Urban Rentals, or the regulation that replaces it.

This modification has been in force since 1 January 2022.

3. Reduced tax rates

For the purchase of the main residence of some taxpayers, the modality of the Onerous Transfer of Property is reduced in the way we are now commenting on and under the following conditions:

The rate of 6% will be applied provided that the property is used as the purchaser’s main residence and the value of the property does not exceed 150.000 euros.
A rate of 5% will be applied when the purchaser is under 35 years of age, the property is intended for the purchaser’s main residence and the maximum price is 150.000 euros. The price reaches 250,000 euros if the purchaser is considered to be a person with a disability or is a member of a large family and the property is intended for the family’s main residence.
A rate of 5% will be applied provided that the purchaser uses the property as their main residence and is a victim of domestic violence, a victim of terrorism or a person affected by terrorism, and the price does not exceed 150,000 euros.
The rate of 5% will be applied if the property is located in a municipality with depopulation problems, does not exceed 150.000 euros and is intended to be the purchaser’s main residence.

In the event that the property is acquired by several people, the reduced tax rate will be applied to the proportional part of the taxable base corresponding to the percentage of participation in the acquisition of the acquirer, unless they are married or in a domestic partnership, in which case it will be sufficient that the requirement is met by one of the members.

This amendment came into force from the day after its publication on 20 October 2021.

4. Tax rates for resale of properties

The 2% rebate is maintained in the modality of Onerous Property Transfer for the purchase of property for resale by real estate professionals when reselling in less than 5 years, fulfilling all the requirements now set out in article 44 of Law 5-2021 on taxes ceded to the autonomous community of Andalusia:

That the buyer incorporates the property into his current assets.
That the property is transferred within the following five years and is again subject to ITP-AJD.

This regulation was already in force, it is simply maintained.

5. Tax rates for the purchase of efficient vehicles

In the modality of onerous capital transfers of the tax on capital transfers and documented legal acts, the reduced tax rate of 1% will be applied to the acquisition of the following movable assets:

Passenger cars, mopeds and motorbikes classified in the Vehicle Register with the “0 emissions” environmental category. This condition will be accredited by means of the corresponding environmental sticker approved by the General Directorate of Traffic.
Bicycles, pedal-assisted pedal cycles and personal mobility vehicles.
Boats propelled in an environmentally friendly manner.

6. Stamp duty modality

In the modality of documented legal acts of the tax on capital transfers and documented legal acts, the first copies of deeds and notarial deeds, when their object is a sum or valuable thing, contain acts or contracts that can be registered in the Property, Mercantile, Industrial Property and Movable Property Registers and are not subject to the tax on inheritance and donations or to the modalities of onerous capital transfers or corporate transactions, will be taxed, in addition to the tax on inheritance and donations, or to the modality of onerous capital transfers or corporate transactions, Mercantile, Industrial Property and Movable Property Registers and are not subject to inheritance and gift tax, nor to the modalities of onerous transfers of assets or corporate transactions, will be taxed, in addition to the fixed rate, at the rate of 1.2%, with regard to such acts or contracts.

In other words, purchases of real estate, when subject to VAT, will be taxed at the rate of 1.2% in the gradual quota of AJD.

This amendment came into force from the day after its publication on 20 October 2021.

Jesús R. Ballesteros

Jesús is Economist and Lawyer. He studied “Licenciatura de Economía´´ (Bussines and Financial Degree) at the University of Navarra, and is “Máster en Tributación´´ (Master Degree in Taxation) by Garrigues (Multinational Company of Legal Services), where he started to work at their office in Granada. After this, he worked for two well-known multinational companies, while he studied “Derecho´´ (Legal Degree) in Madrid until he finally opened Ruiz Ballesteros Lawyers and Tax Advisors at the beginning of 2006. Jesús is a frequent collaborator of Radio Intereconomía at their program “Foro Fiscal´´, this program is based on tax advisement, Cadena Ser and Ondacero. He wrote a Thesis at the University of Granada which he then defended before the correspondent court, obtaining the DEA in Financial and Tax Law. The title of his Thesis: “Intercambio internacional de información tributaria y Paraísos Fiscales´´ (International tax information exchange and Tax Heavens), this makes clear that he is one of the few that have delved into this aspect of the law, and this makes it easier for him to deal with all issues related to international taxation. He is the author of the book “ Como rentabilizar tu declaración de la renta´´ (how to render your annual personal income-tax) and he is the ideologist and developer of the first legal App in Spain. Paxtum, where you can download models of all kind of legal documents. Professor of the “Instituto Superior del Derecho y Economía´´ (Institute of Law and Economics) (ISDE), in the areas of Commercial Law and Tax and Financial Law, he is co-author of their theoretical books in both areas as well as their book of “practical cases” in Financial and Tax Law. He is an expert in the Spanish taxation system, international taxation, and corporate-commercial law. He speaks English and is the Founder and Director of our company. Ruiz Ballesteros Lawyers and Tax Advisors.