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The Balearic Islands, known for their pristine beaches, breathtaking landscapes, and rich cultural heritage, have become one the most desirable locations in Spain for real estate investment.
The Spanish Government has recently announced significant changes to Property Transfer Tax (ITP) and Inheritance and Donations Tax (ISD) in the Balearic Islands. These changes are set to have a significant impact on regional property transactions, particularly for first-time buyers.
Firstly, ISD no longer applies to inheritances and succession agreements (as defined in Balearic civil legislation) between parents and children, grandparents and grandchildren and between spouses.
The Government has also approved the removal of ITP on the purchase of the first main residence where:
The introduction of these changes aims to strengthen the Islands’ property market and encourage regional economic growth. Such incentives are intended to attract more buyers, particularly Balearic residents, by lowering the barriers to property purchase locally and reducing the transactional costs of buying. Overall the measures are expected to have a positive impact on the Balearic property market by improving buying opportunities and strengthening confidence amongst investors.
Understanding the taxation system is crucial for anyone planning on buying or selling property. This applies of course to Property Transfer Tax and Inheritance and Donations Tax following recent announcements. Prospective buyers need to be aware of the tax treatment applicable to their property transaction – an experienced professional adviser will provide valuable guidance on minimising tax exposure whilst complying with local regulations.
If you have any queries regarding the content of this article or anything else relating to mortgages in Spain, feel free to contact us for more information – Patricia.nadal@spectrum-ifa.com
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