Housing Law: What Does it Regulate and how Does it Work?

Following the increase in the Euribor and the rise in mortgages, the government announced tax measures that came into effect in 2023, which included changes to taxes on the sale of homes.

How much tax do I have to pay to sell a home that is 8 years old?

The municipal capital gains tax for 2024 considers that selling a home purchased between 2009 and 2019, that is, with 8 years of age, will be taxed up to 50% more. For example, if you bought a house in 2015 and want to sell it in 2023, 8 years will have passed, so it is considered to be eight years old, and will be taxed on capital gains tax under a coefficient of 0.15 points, 25% more.

If you had made this decision throughout 2022, it would be 7 years old, so this increase would not apply, but would be taxed under a coefficient of 0.12 points.

In addition, there will be an increase in taxes on homes with an age between 5 and 13 years.

What changes to Personal Income Tax does the new law contemplate for 2024?

Income from movable capital and capital gains that are in the range of 200,000 to 300,000 euros will be taxed at 27% (since 2020 they have been taxed at 26%). And the rate for those that are above 300,000 euros will rise to 28%.

The regulations contemplate a new “Solidarity Tax on Large Fortunes”, which consists of taxing those assets that exceed three million euros. It is a temporary measure that will only be applied during 2023 and 2024.

The novelty in the Wealth Tax in 2023 is that assets whose value is between 3 and 5 million will be applied a rate of 1.7%, and 2.1% to those that are between 5 and 10 million. Those that exceed ten million will have a rate of 3.5%.

Assets whose value is between 3 and 5 million will be applied a rate of 1.7%. Likewise, it is also contemplated an exemption of the habitual residence up to 300,000 euros.

What are the new taxes for the purchase of housing in the Valencian Community?

The novelty in the wealth tax is that from 2023, assets that exceed the 1.33 million euros excluding the habitual residence will be taxed more. These sections will experience a rate increase of 0.25 points, so that the 1.33 million section will go from being taxed at a rate of 1.62% to 1.87%, and the highest section, which will start from 10 million euros, may reach 3.75%.

Regarding the Property Transfer Tax as of January 1 of next year, those companies or individuals who acquire a rustic or urban property valued at more than one million euros must pay 11% of the value registered or calculated by the Cadastre in the Property Transfer Tax if it is higher than that which appears in the deed. This is 1% more than what had been applied until that year. However, that 10% will remain the same for those properties that do not reach one million euros.

>>Obtain a valuation of your property for tax deferral or cadastral audit. Request it here

Assets that exceed 1.33 million euros must pay 11% of the value of the home in ITP. That is, those buyers who acquire a home in the Valencian Community that costs 1,000,000 euros must pay 110,000 in Property Transfer Tax as of 2023, 10,000 more than in 2022.

What are the new taxes for the purchase of housing in the Balearic Islands?

The regional budgets for 2024 include a reduction in taxes on the purchase of cheaper homes.

In homes with a price below 270,000 euros, the Property Transfer Tax goes from 5% to 4%. Until this year, the tax was 5% for homes whose value was below 200,000 euros, and 8% for those that were above that amount.

In addition, luxury homes that have a price above 3,000,000 euros will have to pay 12% in the ITP, which until now was 11.5%.

A deduction of 250 euros has also been approved to compensate for the increase in variable rate mortgages.

Request your appraisal to make the change from a variable to a fixed mortgage here

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