Increased taxation on housing = Catalonia, the most expensive

14 June, 2010 No Comments

Following the Spanish Government announcement of increase the reduced IVA (7% to 8%), which taxes the sale of new homes in Spain, the answer of the autonomous communities has been increase, in turn, the ITP (Transfer Tax) applicable to the purchase of second hand homes.

Cantabria, Andalucía, Asturias, Balearic Islands, Catalonia and Extremadura are the Autonomous Communities which have announced that the ITP will rise from 7% to 8% more expensive home purchases for tax purposes, compared to the rest of Spain.

As always, there are exceptions to the rule:

• Rate applied by Canary Islands is 6.5%, because here the IVA does not apply and instead, there is an excise tax at a lower rate.
• Cantabria and Andalusia only taxed at 8%, the sale of houses from € 300,000 and € 400,000 respectively. Here we can guess that could appear rogue …

If we assume a home purchase of 300,000 €, Catalonia, Asturias, Baleares, Cantabria and Extremadura would pay € 24,000 in taxes, while the rest of the country would pay € 3,000 less.

In Catalonia, in addition to this, we must add the payment of stamp duty (which so far was 0.1% of the total loan) and that the Government has announced a 0.2% rise, which no other Autonomous does it.

In summary, Catalonia has the highest personal income tax and it is also the territory where to buy a new house or second-hand is more expensive.