Buying Property in Spain: Tax Deductions

Reducing Your Income Tax Bill

Buying Property in Cataluña

Many people who have chosen to call Barcelona home have

decided to buy a property or at least rent one. If they pay

income tax here then they could well be in line for a tax rebate.

The responsibility for setting local tax exemptions lies with

the regional parliament of Cataluña in Barcelona. These are

typically applicable in addition to any state level tax

exemotions that are available.

Spanish Property Law

With regard to tax breaks relating to property the following

are the most important:

Tax Deduction for Property Purchase

Where a property is purchased that will become the

permanent private residence of the taxpayer then the

following deductions may be made:

1) Generally 6%

2) 9% where any of the following criteria are fulfilled:

Tax Deduction for Property Purchase cntd...

Where the taxpayer purchaser is under 32 years of age

and their taxable income is below €30,000 after applying

individual and family deductions. Where a joint tax return

is presented this limit is applied to each of the tax payers

Where the taxpayer purchaser has been unemployed for

a period of 183 days during the tax period

Tax Deduction for Property Purchase cntd...

Has a disability registered as > 65%

Is part of a family unit that has at least one child

3) 12% where the investment relates to the renovation of a

proeprty for the purposes of making it suitable for a

disabled person

For renting of the principal personal residence

1) Taxpayers may deduct 10% of any rental moneys paid

towards their principal personal residence up to a limit of

€300 where the following requirements are satisfied:

(a) The taxpayer is in any of the following situations:

- Under 32 years of age

- Unemployed for a period of 183 days or more during

the tax period

For renting of the principal personal residence

- Have a disability > 65%

- Be a widow or widower and be 65 years of age or over

(b) The taxable income of the tenant, less the personal and

family exemptions may not be over €20,000

(c) The rent paid must be greater than 10% of the tenant's

net income

For renting of the principal personal residence

2) A maximum of €600 may be deducted from the

autonomous part of the taxpayers annual income tax bill

where the taxpayer is part of a 'large' family as legally

defined and paragraphs (b) and (c) are complied with

3) Where a joint tax return is made then those who are in

the situation described in Section 1 (a) or Section 2 may

For renting of the principal personal residence

apply a maximum deduction of €600 with a maximum total

taxable income of €30,000 less the personal and family

deductions

The same property may not give rise to a deduction of more

than €600

This deduction is not compatible with certain state

exemptions for renting of a private personal residence

Renovation of a Property

A deduction of 1.5% of the investment made in renovating a

property which is destined to be the family home of the

taxpayer may be made

Simply put, property transactions in Spain is unique to

this country with legal assumptions made here that just

don't exist elsewhere

Pitfalls Dealing with Property in Spain

If you would be interested in a free and comprehensive

guide that will help you to avoid the typical pitfalls the

foreign buyers of property fall into as well as dealing

with issues such as...

Guide to Dealing with Property in Spain

To find out how to deal with such issues as...

Which legal checks on a property

are vital to avoid any problems

The step-by-step process

of buying a property in Spain

As well as...

Typical ploys to watch out for

to avoid being defrauded.

Property taxes you pay and

those you don't!

And much more...

Download the myAdvocate Spain guide to Dealing with Property in Spain by clicking on:

Taxes when Purchasing Property in Spain

For for further information on the property purchase process specifically go to:

Real estate lawyer Spain

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