Modification of the rate taxation on the capital – Transfer tax and on the documented legal acts tax.The Junta de Andalucía has approved the General Budget Law which includes an increase of the rate of taxation on the Onerous Capital-Transfer Tax and on Documented Legal Acts (I.T.P & A.J.D), which affects to the Tax paid by a purchaser of a real estate property from a non promoter seller.

SPANISH ROYAL DECREE no. 18/2012 ABOUT THE REORGANIZATION AND SALE OF REAL ESTATES OF THE FINANCIAL SECTOR.50% TAX EXEMPTION ON INCOMES AND PROFITS FROM THE SALE OF REAL ESTATES.

On May 12th 2012 it was published and entered into force the “Spanish Royal Decree no. 18/2012, on the Reorganization and Sale of Real Estate assets from the Financial Sector”, which, in its final provisions (1st, 2nd & 3rd), introduces some tax modifications, being to highlight the following:

– Modification of the Company Tax Law: it establishes a tax exemption of 50% of the income obtained as a result of the transfer of urban real estates accounted as non-current assets, or non-current assets held for sale (i.e it would not apply to those assets accounted as stocks).

– Modification of the Non-Residents Income Tax Law: it establishes a Tax exemption of 50% on the capital gains realized as a result of the transmission of urban real estates located in Spain.

The Royal Decree modifies as well the Spanish Income Tax Law, establishing a similar tax exemption for Tax Residents in Spain.

In all cases, this tax exemption is available only in case of transmission of properties acquired between 12th May 2012 and 31st December 2012, and shall not apply if the acquisition or transfer occurs from or to the spouse, neither from or to a person with a relationship of kinship until second degree, nor from or to any linked person (according to the article 42 of the Spanish Commerce Code).

Marbella, 16th May 2012.

Angeles Contreras
Pérez de Vargas Abogados