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LASTEST CHANGES IN PROPERTY TAXATION IN THE MURCIA REGION.

Law 6/2013 of 8th July, taxation measures

Came into effect:  11th July 2013

These latest changes will affect you if you are considering buying a resale / new property in Murcia, set up or amend your mortgage or you have been involved in an inheritance process.

We highly advise you to start working out your figures as you may find there is an increase on taxes to pay.

Please find below the new update:


  1. TRANSFER AND STAMP DUTY TAX
  • Transfer Tax affecting resale purchases will now be 8%. (before 11th July 2013 it was 7%)

Example: If you buy a property valued at 100K, you will now be paying 8,000 in taxes where previously you would have had to pay 7,000

  • Stamp Duty Tax will now be 1.5% (before 11th July it was 1.2%)

This tax mainly affects mortgages.  If you are taking out a mortgage on your property or are considering to amend your existing mortgage, you will be affected by this tax rise.

Stamp duty tax is paid on the mortgage liability, so called responsabilidad hipotecari, which can be estimated as 1.5 times of the mortgage value.

  • New Stamp Duty Tax of 2% for off plan purchases.

If you are planning to buy an off plan property you will now have to pay a total of 12% in tax (10% IVA + 2% Stamp Duty).

Example: If you buy a property off plan valued at 100,000, you will now be paying 12,000 in taxes where previously you would have had to pay 10,000.

  • Stamp Duty Tax has increased from 2% to 2.5% (as of 11th July).

This is the case of resale purchases between companies or self-employments, when buying the property for a business activity and IVA on purchase can be deducted when submitting tax forms.

2.  INHERITANCE TAX

Before the 11th July 2013 inheritance tax for fiscal residents was 1% for a spouse and children older than 21.  This has now been abolished and the only exception would be for inheritors *younger than 21 years old. Both fiscal and non fiscal residents will now be taxed equally (with the exception of the above *).

From now on, Fiscal residents will only have a 15,956.87 allowance and inheritors younger than 21 years will have a 47,858.59 allowance, the same as non residents.

Taking the above allowance into account, the remaining inheritance tax will be based on the sliding scale below, (Law 14/2012, December 27th).

Taxable Base Taxable up to Tax Rate %

0,00 7,993.46

7.65

7,993.46 15,980.91

8.50

15,980.91 23,968.36

9.35

23,968.36 31,955.81

10.20

31,955.81 39,943.26

11.05

39,943.26 47,930.72

11.90

47,930.72 55,918.17

12.75

55,918.17 63,095.62

13.60

63,095.62 71,893.07

14.45

71,893.07 79,880.52

15.30

79,880.52 119,757.67

16.15

119,757.67 159,634.83

18.70

159,634.83 239,389.13

21.25

239,389.13 398,777.54

25.50

398,777.54 797,555.08

31.75

797,555.08 And over

36.50

Example:  If you inherit 17,000.00 your inheritance tax will be worked out as follows.  0-7,993.46 at 7.65% = 611.49. 7,993.46 to 15,980.91 (7,987.45) at 8.50% = 678.93.  15,980.91 to 17,000.00 (1,019.09) at 9.35% = 95.28.  total tax payable = 1,385.70.

3.  INCOME TAX

This came into effect from 1st January 2013.

Income Tax is a Government Tax transferred to the Autonomous Communities, where they have ruled their own tax rates, and as a result we have two different tax rates applying over this National tax, some established by the Government and others by the Autonomous Communities.

Income tax rates will increase by 1% for earnings above 120,000.

Tax rates for the Autonomous Community of Murcia from 1st January 2013 will be based on the following sliding scale:

Taxable Base Taxable up to Tax Rate %

0,00 17,707.20

12.00

17,707.20 33,007.20

14.00

33.007,20 53,407.20

18.50

53.407,20 120,000.20

21.50

120.000,20 175,000.20

23.50

175.000,20 And above

24.50

Example:  If you earn 50,000.00 for the year, your tax will be worked out as follows. 0-17,707.20 at 12% = 2,124.86. 17,707.20 to 33,007.20 (15,300.00) at 14% = 2,142.00.  33,007.20 to 50,000.00 (16,992.80) at 18.5% = 3,143.66.  total tax payable = 7,410.52.

4. WEALTH TAX

This is the first time that the Autonomous Community of Murcia has introduced changes to this Law. This came into force on the 1st January 2013.

Wealth Tax will be payable according to the following sliding scale:

Taxable Base Taxable up to  Tax Rate %

0,00 167,129.45

0.24

167,129.45 334,246.87

0.36

334,252.88 668,499.75

0.60

668,499.75 1,366,999.51

1.08

1,336,999.51 2,673,999.01

1.56

2,673,999.01 5,347,998.03

2.04

5,347,998.03 10,695,996.06

2.52

10,695,996.06 And above

3.00

 

The total wealth tax payable can be calculated using the same example above.

Take always professional advice from an experience Law Firm as Corral&Alcaraz.

 

corralalcarazLASTEST CHANGES IN PROPERTY TAXATION IN THE MURCIA REGION.