Buying a house in Marbella is cheaper now, but how much?
Javier Nieto - May 24, 2021 - Property Advice
Applicable from April 27th, 2021, in Andalucía ITP and AJD taxes relating to the acquisition of a home have suffered a significant reduction with the aim of turning the region into perhaps the best area in Spain to invest, live and work.
The property transfer tax (ITP) has dropped to a fixed rate of 7%, from a previous variable rate of 8%, 9% and 10% depending on tranches.
While the tax rate for documented legal acts (AJD) has been reduced from 1.5% to 1.2%.
More information about the tax reduction can be found here
At Pure Living Properties we consider that the Costa del Sol, and especially Marbella , is one of the destinations where this tax reduction could have a more notable impact . Marbella offers a very high quality market in second homes to both national and international buyers. After the COVID19 crisis, many buyers have decided not to wait any longer and acquire a quality property, in one of the safest environments in the European Union.
Local and foreign capital will also adopt this tax reduction in the purchase of properties as one more reason to increase investment in Marbella’s real estate market, one of the most resistant markets in Europe to the crises of recent years.
Save € 34,000 when you buy a 1,500,000 euro apartment on the Golden Mile
Puente Romano has become one of the areas with the highest real estate investment in recent years. This lovely one bedroom suite with an unbeatable location and exquisite decoration, meant € 139,000 in taxes before the new regulations were applied, whereas it would now be € 105,000.
The calculation of the previous ITP would be:
- 8% tax up to € 400,000 (400,000 * 0.08, that is € 32,000).
- 9% tax between € 400,000 and € 700,000. In this case the calculation would look like this: (700,000-400,000) * 0.09 = € 27,000.
- 10% above the amount of € 700,000, in our example this means € 800,000 subject to the 10% rate (i.e. € 80,000).
All this adds up to € 139,000. However, the current fixed rate is 7%, so the amount would be reduced to € 105,000.
From € 90,250 less in taxes for a luxury villa in Marbella
Rocío de Nagüeles is one of the most emblematic and sought-after areas of the Golden Mile, with a privileged location, close to the best international schools on the coast, and with all kinds of nearby services. This luxurious modern style villa, completely renovated with high quality materials and state-of-the-art interior design, situated in the heart of Nagüeles, meant € 326,500 in taxes before the reduction and now equates to € 236,250.
Let’s look at the previous ITP calculation:
- 8% tax up to € 400,000 (400,000 * 0.08, that is € 32,000).
- 9% tax between € 400,000 and € 700,000. In this case the calculation would look like this: (700,000-400,000) * 0.09 = € 27,000.
- 10% above the amount of € 700,000, in this case it means € 2,675,000 subject to the 10% rate (that is, € 267,500).
This would give us a total of € 326,500 of ITP. But now the current rate is a fixed rate of 7%, so the amount would be reduced to € 236,250.
From € 424,000 in tax savings when investing in a majestic villa located in the exclusive gated community of La Zagaleta
This tax reduction is good news for future buyers of luxurious villas priced at over 10 million. Specifically, this spectacular villa which has 9 bedrooms, a leisure area with a cinema room, a bar, a wine cellar … is a clear investment opportunity.
The amount to be paid with the old ITP would be € 1,439,000, which would be broken down as follows.
- 8% tax up to € 400,000 (400,000 * 0.08, that is € 32,000).
- 9% tax between € 400,000 and € 700,000. In this case the calculation would look like this: (700,000-400,000) * 0.09 = € 27,000.
- 10% above the amount of € 700,000, in this case it means € 13,800,000 subject to the 10% rate (that is, € 1,380,000).
With the current 7%, you would pay € 1,015,000, which means a considerable saving of € 424,000.
At Pure Living Properties we are already exclusively advising our investors, former buyers and even owners about the new opportunities that are arising with these new tax rates.
New investors or potential buyers looking for the best conditions for acquiring a quality home in Marbella can request a consult with our experts with no obligation.
Javier is the founder and CEO of Pure Living Properties. Born and raised in Marbella in an entrepreneurial family who settled on the Costa del Sol in the 1960s, when Marbella’s real estate and tourism industry was just a fledgling market, Javier is an expert connoisseur of Puente Romano, which he calls home, and the Golden Mile, but also of the best areas, projects and companies, as their owners and developers have been among his inner circle since childhood.