The Junta de Andalucía passed a Law, 5/2021, on October 20th, 2021 affecting some of the taxes applicable to the Andalucía region. The Transfer Tax applicable when buying a home was one of the taxes affected by those changes which came into force January 1st, 2022. These are the details of those changes:

- The general tax rate has been fixed on a flat 7% (versus the previous 8%, 9% and 10%) for the purchase of second hand properties. This reduction was previously approved in April 2021, but only for the year 2021, and has now been adopted permanently.

- There are also some cases with reduced tax rates as follows:

A reduced tax rate of 3,5% for buyers younger than 35 years, numerous families and handicapped purchasers with a maximum home value of 150.000 € for young buyers and 250.000 € for the last two groups. This reduced rate with a maximum home value of 150.000 € is also applicable to victims of domestic violence, victims of terrorism and to properties located in municipalities with depopulation problems.
A reduced tax rate of 6% for sales where the home is going to be the permanent resident of the buyer and the price of the home does not exceed 150.000 €.
A reduced tax rate of 2% when the purchase party is a company registered as a real estate company complying with some specific regulations.

* Always remember that the Transfer Tax is applicable only on the purchase of second hand properties while VAT applies to the purchase of new homes where the flat rate is 10%.

** Since every case is different, please check the contents of this article with your lawyer or tax advisor.