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Photo credit: Diario Sur.
By Raymundo Larraín Nesbitt
Lawyer - abogado
11th of May 2021
Last month, we reported drastic tax changes in Andalusia that reduced significantly both Property Transfer Tax and Stamp Duty. This is a new tax milestone, which coupled with the significant tax changes of April 2019 in both inheritance tax and gift tax, are effectively turning the region of Andalusia into the most tax-friendly region in all of Spain.
As I relentlessly care to point out every time I get the occasion, low taxation fosters foreign investments on a large scale. Which in turn creates wealth and jobs in its wake benefiting society at large. This is not idle banter or philosophical musings. Lowering taxes has an immediate and significant impact on the real estate market which we notice because we are at the frontline of it.
Andalusia’s right-wing coalition government have publicly announced they will be lowering furthermore a slew of six taxes, including wealth tax. Within the span of only three years, since the new right-wing government took office, the spate of tax changes has turned the tables. Taxation was traditionally Andalusia’s Achille’s heel and is now fast becoming its most important selling point, never mind the sun or beach!
In fact, so much so, that we keep witnessing how client after client after client pay nothing in IHT, even on inheriting large estates since 2019. As pointed out in previous taxation articles, lowering taxes will no doubt act as beacon strongly attracting affluent individuals the world over who relentlessly seek to preserve and increase their family’s wealth.
As a result of this fiscal policy instigated by our regional right-wing government, we are witnessing in 2021 how Marbella’s (ultra) high-end market is performing spectacularly well with multiple mansions selling in the exclusive gated resorts of Sierra Blanca for over €20mn and several others at La Zagaleta for over €30mn. Last week we saw yet another €32mn mansion sold after five years on the market. Diario Sur reports: The most expensive mansion in Europe sold in Marbella. In March we reported on another one of €40mn being sold.
But don’t get me wrong, these tax changes also - and foremost - benefit low and middle-class income bracket families who will now not see their wealth and life savings being confiscated by voracious hard-left wing governments that only contribute to spread misery. Only in 2019, just before the new tax changes in IHT were enacted by the new government, over 10,000 Andalusian families were forced to renounce to their inheritance every year because they were unable to afford paying the steep IHT (source). In no other region of Spain (other than Catalonia, also under the control of a hard-left wing coalition) did so many families need to give up their parent's inheritance because they were unable to pay the extortionate tax rates set by greedy politicians. Mercifully, they were ousted by popular vote, and after the new administration stepped in office, it instigated the ambitious key tax changes of 2019 and now in 2021. As a result, you now don’t see anyone (rich or poor) in Andalusia being forced to renounce to their family’s life savings to finance politicians’ delusional dreams.
And to close, to boot Andalusia has never made more tax revenue than when it bravely lowered its taxes back in 2019 (source) because - again - low taxation (greatly) attracts investments & commercial activity, kickstarting the economy (Laffer curve). Is it so very hard to understand?
Make no mistake, tax hikes only benefit politicians and their ideological cronies, no one else.
“The inherent vice of capitalism is the unequal sharing of blessings. The inherent virtue of Socialism is the equal sharing of miseries.” – Winston Churchill
Sir Winston Leonard Spencer-Churchill (1874 – 1965). Born into a privileged aristocratic family, he was an eminent British career officer, artist, historian, delicious eccentric, and laureate writer – awarded the Nobel Prize in Literature in 1953 “for his mastery of historical and biographical description as well as for brilliant oratory in defending exalted human values.” With dogged single-minded determination, he defied alone and managed to stave off, the tyrannical Nazi wave in WWII, unwaveringly assisted by our American cousins, which threatened to swallow whole the United Kingdom as it had already overrun most of Europe. He resolutely led the country out of its darkest hour, restored Europe’s freedom, and laid the groundwork for peace and prosperity which all future generations have come to enjoy since and taken for granted, or so it would seem. As a keen-eyed historian, in line with fellow Founding Fathers Schuman and Monnet, he was quick to grasp and understand the importance of a united Europe to avoid repeat past mistakes which had resulted in two world wars that ravaged the continent. Consequently, he became a staunch defender of the idea of creating a single supranational political and economic entity which reconciled old foes and would act as a guarantor of peace & prosperity in the continent (in his own words, a “United States of Europe”); in time, this European fellowship would be known to us as the European Union. Churchill was instrumental, and the key driving force, behind the creation of the Council of Europe, a forerunner of what is now the European Union. He is credited as one of eleven Founding Fathers of the Union. Churchill incarnated like no other the best of British values. A child of the House of Commons, he was a proud servant of the State, never its master. A true statesman that would always put ahead of any consideration the best interests of our people, by tearing down divisive walls and fostering at every opportunity union.
Simply put, he’s likely the finest British politician statesman ever to grace 10 Downing Street.
At LNA we can assist you buying, selling or renting out your property in Spain. We have 18 years’ experience in conveyance & tax. We are also specialized in Immigration & Residency permits.
Larraín Nesbitt Abogados, small on fees, big on service.
Larraín Nesbitt Lawyers is a law firm specialized in taxation, inheritance, conveyancing, residency, and litigation. We will be very pleased to discuss your matter with you. You can contact us by e-mail at firstname.lastname@example.org, by telephone on (+34) 952 19 22 88, or by completing our contact form to book an appointment.
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