Income Tax Cut in the Andalusian
Income from property and investments are to be exempt from wealth tax in the Andalucían region of southern Spain, following a recent announcement by the government. Wealth tax will still apply to businesses and salary income. This change is good news for expats, who will no longer have to pay this tax on their retirement or overseas income. Investors now have another reason to consider acquiring property in Andalusía.
In an effort to attract investment and generate growth, President Juanma Moreno announced that the Junta will be reducing income tax as well as canceling the water tax by 2023.
A change in the tax will have a very positive impact on increasing revenue and attracting investment. The tax accounts for 0.6% of regional government income (95 million euros a year).
Approximately 18 million euros was lost in wealth tax and personal income tax in 2020 because ten of the top 20 wealth taxpayers in 2019 left Andalusia. According to the regional government’s president, high-income people who spend time in Andalusia should make it their permanent home and pay taxes there.
7,000 new residents are expected to be attracted by the tax reduction, according to Moreno. According to him, income taxes and indirect taxes will exceed by far that 0.6% of income.
Personal income tax will be reduced by 4.3% (or above the increase in salaries predicted by the government). As a result, Andalusian residents will have 125 million euros in their bank accounts.
Additionally, the 140 million euro water tax will be suspended in 2023.
This communication is for informational purposes only based on our understanding of current legislation and practices which are subject to change and are not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.
Schedule an Obligation-free Call With an Adviser
By scheduling an appointment with an adviser they will reach out to you at your requested time. Personal advice, whenever it suits you.