Tax burden for Luxury Properties
Tax burden for luxury properties in Mallorca increases
The Balearic government wants to increase the real estate transfer tax in the high-priced sector in the coming year.
The tax wheel on Mallorca continues to turn. The Balearic government wants to increase the real estate transfer tax for luxury properties on Mallorca and neighboring islands from next year.
What is planned?
For houses and apartments on the islands that are sold for more than one million euros, the tax burden is expected to increase from the current maximum rate 11.5 to 12 percent. There is also to be a further step for properties worth more than two million euros. These could be subject to 13 percent land transfer tax in the future.
This is what the left-wing party Podemos has demanded. Now the coalition must reach agreement. On the Balearic Islands, the tax has already been increased three times since 2014 - most recently at the beginning of this year. The announced reform would thus be the fourth increase in land transfer tax within a few years.
The measure will scare away investors, is the criticism of the Association of Foreign Real Estate Entrepreneurs in Mallorca ABINI. The association has published a letter of protest about the plan. It is a blow to the island's economy.
High tax burden on the Balearic Islands
The real estate transfer tax belongs to the competence of the "Comunidades Autonomas", for this reason exist between the Spanish regions partly substantial differences with the taxation of real estate transfers. The Balearic Islands have a high tax burden on sales of houses and apartments compared to the rest of the country.
Using the tax calculator of the PlattesGroup, you can already calculate your tax burden of the real estate transfer tax for 2023 now.
This article was prepared by the tax and legal firm PlattesGroup, based in Palma de Mallorca.