The Andalucian government – covering the south of Spain – is scrapping a tax which wealthy residents and non-resident homeowners in the region must pay on their worldwide assets.
Andalucian regional president Juanma Moreno announced that wealthy residents and non-residents (second home-owners in the region) will no longer have to pay el impuesto de patrimonio, as wealth tax is called in Spanish.
Spanish nationals and foreigners who reside in the southern Spanish region or have a second home there, and whose worldwide assets are above €700,000, will receive a 100% tax deduction on said wealth tax.
The regional governments of the country’s 17 autonomous communities have the freedom to introduce tax deductions and asset exemptions as they see fit, but up to now the only region in which the wealth tax was non-existent was Madrid.
Arjen Spittael, sales and listings nanager at Lucas Fox Marbella, said: “This wealth tax has been a particularly negative thing for high net-worth buyers investing in exclusive properties. Indeed, we already know of some who were planning to sell their properties in Spain because of the high wealth tax.
“This should be a major incentive to buyers for high value properties. Although this initiative reduces revenue for the regional government in the short term, it will attract more home and business owners to Andalucía. They will not have to pay wealth tax anymore, but will be taxed on their income, as standard. Those income taxes should secure Andalucía more investment in the long run, than keeping the wealth tax. Also, this will hopefully attract more business owners setting up their businesses here, which in turn will pump money into the economy while creating new jobs. It’s a win win!”
Prior to the wealth tax, residents and non-residents with worldwide assets surpassing €700,000, would have to pay between 0.2% and 2.5% on any amount above this threshold. For example, if a person’s worldwide assets added up to €750,000, they would pay 0.2% tax on €50,000.
Around 20,000 people in Andalucía paid wealth tax in 2021. It is estimated that the scrapping of wealth tax will attract approximately 7,000 new high-earning tax contributors to Andalucía.
As I see it these types of tax are so damaging not just in the short term but long term as it makes it clear what MIGHT be introduced in the future. It shows the mind set of politicians in countries. Look back at the Cypriot banks taking funds from peoples accounts a few yeares ago, it has taken years for any level of confidence to allow the market to start to recover. Our idiot Government in the the UK seem to following the same mentality in their Landlord Bashing which has been going on for years; it impact significantly on trust and confidence and once that is lost it takes a generation before any trust returns. I wonder if others share my views on this?
I share fully your views.
If the Govt and Councils keep bashing us Landlords that do the providing, we then stop providing. Just as in the Wealth tax. You have less people to tax and it costs u more overall.
In Nottingham, the Council are paying so much out in deposits and rents up fronts to Landlords, it’s shocking. One Council department hurts the Council, other department begs us. Same Councillor over sees the two departments. Proper thick they are.
Mick, there seems to be 2 types of people in this world those who work in the public sector and those who are in the private sector. The main difference in the private sector people live and trade on their wits and react better to market conditions, in the public sector it is other peoples’ money they are spending or in many cases wasting and there is not impact on them so less reactive. At a LL show I remember talking to a council representative trying to convince me to let property to their tenants and he found it quite surprising when I expressed the opinion they lack ethics, lack of professionlism and were not trustworth as a result of telling tenants to stay put until bailiffs called. Pointing out they were inciting contempt of court by advising tenants to ingnore initial court order that tenants should vacate the property within 14 days. I said why the hell do you think I would trust any council officer given how councils behave? The same old same old contiues to today. In my mind this rates councils in the same league as tenants with poor credit ratings, history of anti social behaviour or CCJ’s. They wreck their own propspects by their own actions. A bit like a prime minister who puts the country’s economy at risk for their own vanity, supported by those drongoes that blindly follow her like the pied piper. Perhaps the Spanish might like to look at Monaco as a model for a successful economy. Just a thought!