From 1 January 2023, all residents and non-residents who own property in Andalucía worth more than 700.000€, will be entitled to a 100% reduction in Wealth Tax, which means that the tax payable will be zero.
In last Tuesday’s official publication on the Wealth Tax, the Junta de Andalucía announced that the tax rate will be reduced by 100%, with the aim of attracting more talent with investment capacity to Andalusia, thus promoting Andalusian economic activity and job creation.
It is a fact that the existence of this tax has had a negative influence on the achievement of the objective described above, which has not been helped by the fact that this tax no longer exists in other European Union countries or in the Community of Madrid.
The abolition of the effective taxation of Wealth Tax will encourage the purchase of property in Andalusia by nationals and internationals.
The condition of Wealth Tax taxpayer, in the case of the personal obligation to contribute, being coordinated with the condition of Personal Income Tax taxpayer, tends to compensate the loss of Wealth Tax revenue with the increase in Personal Income Tax revenue.
So far, with the data available for 2020, the impact of this tax on total regional revenue was 0.6%, which translates into 93,341,786 euros.
This measure on Wealth Tax will mean a delay of one year in its application by Andalusian taxpayers, i.e. until the return corresponding to the 2023 tax year, which will be made in April-June 2024.
It should be borne in mind that this publication also establishes the abolition of the Water Tax for one year and includes measures relating to Personal Income Tax, including the deflation of the first brackets of the regional rate and the increase in the exemptions for the personal and family minimum. All of these are measures to alleviate the inflation suffered in the last year.
For more information, please consult the official publication.
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