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Reduced taxes on the purchase of real estate in Madrid

Since January 1, 2014 purchase of housing in the secondary market of Madrid cost many cheaper because some taxes were reduced .

So regional government lowered property transfer tax (ITP) from 7% to 6%, and tax preparation of legal acts (AJD) – from 1% to 0.75%. Therefore , taxes on real estate secondary market in Madrid has become one of the lowest in the country.

Thanks to these changes , when buying real price range of 200 thousand euros , buyer can save 2,500 euros . Just worth considering that the tax is calculated on the appraised value of the property , which is set by autonomous authorities , rather than the actual price for which the facility was sold .

” By reducing the ATP and AJD authorities expect to resume activity not only in the real estate sector , but also in other sectors of the economy ” – said Jose Maria Rotelyar , Vice Minister of Finance of the Autonomous Community of Madrid. ” The real estate sector is obliged to make an enormous contribution to the economic recovery , and taxation is one of the most significant factors in this market – it can become one of the most decisive in the decision to invest in real estate ,” – adds Rotelyar .

Regional authorities also noted that the reduction in ITP will cost the state treasury of 76 million euros , and the decrease AJD – 50 million, however , the capital tax policy in the field of housing, does not coincide with the trends at the national level – in other autonomous regions such as Catalonia , ITP grew by 10% and on par with VAT . It is also worth noting that the share of tax accounting for up to 22 % of the final value of real estate in Spain. If we consider indirect taxes , the figure will be more than 30% .

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