Raise taxes on luxury homes

Luxury home buyers will pay more taxes next year. The Government Budgets for 2022 foresee an increase from 11% to 11.5% of the property transfer tax, which is paid on the sale of homes. It will affect properties of more than one million euros and, with this measure, the Government intends to “reinforce” the progressivity of this tax in its highest section, as explained by the Minister of Hisenda, Rosario Sánchez.

This rise will also help increase income from this concept, since the luxury housing market is one of the most active in the Balearic Islands. The Executive of Francina Armengol plans to enter 679.7 million for this concept next year, 63% more than what it budgeted in 2021.

It is not the only fiscal measure included in next year’s accounts. In parallel, the Government extends the tax reduction for the purchase of habitual residence for properties with less than 200,000 inhabitants. Those who buy their first home at this price pay 5% compared to the 8% that was paid until 2019, the year in which the reduction was approved.

This reduction is now extended to people who buy a home, even if it is not the first home they buy, as long as it is the buyer’s habitual home and that they do not have any other property rights of use or enjoyment over another home.

The Budgets for next year also include a new tax deduction for single-parent families, which, in certain circumstances, will have the same consideration as large families. Up to 400 euros may be deducted from personal income tax for the rental of the habitual residence provided that the single-parent family consists of a single child with a disability equal to or greater than 33% or has two or more children.

The Government maintains intact the rest of the fiscal measures for next year, such as deductions of 100 euros for the expenses of buying textbooks or learning languages ​​abroad or deduction of up to 600 euros for reconciliation reasons of 40% of the expenses of school, nursery schools, dining room or extracurricular for children under 6 years of age.

Source: Periódico de Ibiza y Formentera