If you are thinking of buying or selling a property from January 1, 2022, you will be interested in knowing what changes the Government is preparing for us when it comes to checking out.
If the house is newly built, we will not have many problems, apart from being able to find it available on the market, because new apartments carry a common state tax for all: VAT at the single rate of 10% and the tax base is the deed value. . But for subsequent transmissions, the tax paid is the Property Transfer Tax, better known as ITP, and it is autonomous in nature. Not all the autonomous communities have the same rate for this tax and the cheapest ITP, on the transfer of homes, is found in the Basque Country, with 4%, and in Catalonia we have the highest, 10%, which will be 11% if our tax base exceeds one million euros. At the moment, regarding the tax rates we will not have any difference with the entry of the new year and it continues to be based on RD 1/1993, which establishes the what and how of the ITP. But taking advantage of a recent law, Law 11/2021 on the prevention and fight against fraud, the State has made some "small" changes when calculating what the ITP tax base will be and this novelty will directly affect our pockets if we buy or we sell below that price.
Until December 31 of this year, the tax base to settle the ITP was the price that appeared in the deed, provided that this price was equal to or above the cadastral value multiplied by a variable coefficient depending on the municipality. Remember that the cadastral value is a theoretical data of how much our property is worth by the State and is the sum of the value of the land and the value of the construction. This cadastral value serves as the basis for the municipalities to charge us the Real Estate Tax or IBI and is used as the basis for calculating the equity value for the estate tax. Since this cadastral value is theoretical, there are always substantial differences between the real deed value and the cadastral value, and normally the latter is usually lower than the real sale price. It was easy to calculate how much ITP had to be paid because the tax base was the deed price (as long as the deed price was higher than the Cadastre price multiplied by the coefficient, which often happened).
But from the new year a new "cadastral value" appears, which in principle they tell us will only be used to calculate the ITP and the wealth tax, being the average value of all sales made in a specific area. Notaries will be obliged to communicate to the Government the sale price that appears in each deed and the location of the property and the State, in December of each year, will make public these values per square meter. Ultimately, the State will become the appraiser of our homes and will tell us what the "real" value is, whether we are buyers or sellers. So, if the sale price is above that cadastral value, we will pay taxes for the deed value but if we sell below the cadastral value we will have to pay for the cadastral value, and since the calculation base is an average, we will always have values for below, that they will be taxed at the average value; and values above, which will be taxed for the real value. Basically, for all values below the average, more taxes will be paid than up to now. By the way, if you are sellers the same thing happens, the benefits will be taxed for the difference between the purchase price and the sale price and if we sell below the average, the cadastral price will have to be set and we will have to pay taxes for benefits that will not be real.
If you want to avoid surprises before selling or buying a property, visit a collegiate API that is part of the APIalia network to advise you.
On May 9, 2023, the Council of Ministers approved a line of ICO guarantees to allow young people and families with dependent minors to access a mortgage to buy their first home with 100% financing. The objective is to facilitate the acquisition of approximately 50,000 homes and will be in force until December 31, 2025.
If you are under 35 years of age or families with dependent minors (in this case with no age limit) you have a unique opportunity to own a home with 100% financing of the purchase price.
From VicMoBa, we can help you make your dream of owning your regular home come true for the price of renting. Do you want us to talk about it and study your case? We are with you
On November 9, Royal Decree-Law 26/2021, of November 8, was published in the BOE, which adapts the revised text of the Local Tax Regulatory Law to the recent jurisprudence of the Constitutional Court regarding the ' Tax on the Increase in Value of Urban Land, the well-known municipal capital gain.
This Royal Decree-Law approves the new regulation to calculate the Tax on the Increase in Value of Urban Land (IIVTNU), given that the aforementioned Judgment of the Constitutional Court declares the unconstitutionality, exclusively, of the method of calculating the tax base of that tax.
The judgment also expressly establishes that it is not possible to request the rectification of self-assessments submitted prior to October 26, 2021, against which rectification had not been previously requested, nor of settlements and tours, which were not contested. , prior to that same date.
Since when will the new regulations apply?
Its entry into force took place on November 10, and although the City Councils will have to adapt their tax ordinances in the next 6 months, until now they will be able to settle the tax in accordance with what is established in the Decree-Law.
Will it be retroactive?
No, it will not have retroactive effects, so that the operations carried out between 10/26/2021 and 11/10/2021, when the Royal Decree-Law came into force, in principle will not be subject to the aforementioned municipal tax.
Nor, in principle, are cases that correspond to taxable events prior to these dates and that have not been settled (for example: inheritances pending acceptance) are subject to this tax.
What changes are introduced?
1) The first novelty introduced is the taxation of capital gains generated in periods of less than one year. The RDL imposes the taxation of those operations of sale, inheritance and donation, as long as they generate a capital gain, even if a year has not elapsed since their last transmission.
2) The second novelty is the possibility of choosing between two systems, because that is how the Constitutional Judgment itself imposed it when determining that the calculation of the capital gain could not be limited to a single method. The two systems that are articulated are the so-called objective and the one that responds to the really generated surplus value.
- “Objective” system: it is the same as that up to now has been applied, it consists in that the taxable base of the tax is the result of multiplying the cadastral value of the land at the time of accrual, but applying new coefficients that are already set by the Decree itself and that they will be updated, limiting the capacity of the Town Councils when approving them, since they will only be able to correct them downwards (up to 15%) depending on their degree of updating.
- “Real Capital Gain” system: which can be used in those transfers of a property in which there is land and construction. Here, the real capital gain of the land will be equal to the difference between the sale price and the acquisition price after applying the proportion that represents the cadastral value of the land over the total cadastral value. That is, it will be taxed based on the real capital gain obtained at the time of the transfer of a property and that will be determined by the difference between the transfer value of the land and the acquisition value. If the taxpayer shows that the real capital gain is lower than that resulting from the objective estimation method, he may apply the real one.
These calculations may be subject to verification by the Town Councils, according to another novelty that the standard introduces.
Will I have to pay taxes even if there is no capital gain?
No. The Royal Decree-Law also fulfills the mandate of the Constitutional Court in its Sentence 59/2017 of not subjecting to tax those situations where there is no increase in the value of the land. To do this, a new assumption of non-taxation is introduced for operations in which it is found, at the request of the taxpayer, that an increase in value has not been obtained.
What will I have to do to avoid paying taxes if I have no capital gain?
The interested party must prove the non-existence of an increase in value by declaring the transfer, and must provide all the documents related to the transfer and acquisition. To verify the non-existence of an increase in value, the transmission or acquisition value will be taken as the one that is greater than what appears in the title that documents the operation or the one verified, where appropriate, by the Tax Administration, in accordance with the new faculty that is granted to the Town Halls.
When it comes to buying a home, few are the lucky ones who can do it in cash, and most of the time we will need a loan. To be more specific, we will have to request a mortgage loan that will also accompany us for decades. Therefore, it is very important to do a good job of selecting to find the best mortgage.
Here are some tips:
1. Having something saved is key to obtaining good conditions.
In the process of buying a home you have to keep in mind that you will have to face some notary fees and taxes. These expenses can be around 10% of the value of the home you are buying, and will be added to the amount you will need to buy the home. On the other hand, most of the entities offer by default mortgages for 80% of the value of the house. In fact, they usually choose the minimum value between the appraisal and the purchase value. For example, if you want to buy a property for € 110,000 and it turns out that the appraisal gives it a value of € 100,000, the bank will offer you a € 80,000 mortgage (80% of € 100,000, in this case the appraisal was lower of the purchase price).
For the negotiation with the bank and the conditions to go in your favor, ideally you should have saved 30% of the value of the home you want to buy (10% constitution, notaries, taxes, and 20% to pay the apartment and leave only 80 % of its value pending coverage).
2. Fixed, variable or mixed interest?
In general, it is best not to play at guessing the future because, as the Nobel Prize winner in Physics Niels Bohr said, "making predictions is very difficult, especially when it comes to the future."
The only modality that does not depend on the future is the fixed rate mortgage, the others will be indexed to something. The most common will be the Euribor, right now the Euribor has a very low interest rate (so much, that it is negative), but a little over 6 years ago it reached more than 5%, and this can happen again because it was not something exceptional. Therefore, the interests of a variable rate mortgage can vary a lot.
The one you have to run away from is the mixed interest rate. It is a new modality in which the bank combines the worst of fixed rate mortgages and the worst of variable rate mortgages in a single mortgage. Its offer is usually that the first years you are offered a fixed rate ("for your peace of mind") and in the future it will go to variable.
This works totally against you. The Euribor is low now, and is expected to rise in a few years. So the opposite suits you. Variable mortgage now to take advantage of the low Euribor, and a fixed interest rate mortgage in the future to avoid surprises with the Euribor.
3. Be careful, the interest rate is not what you have to look at.
The mortgage is something that will accompany us for many years. You have to look at the fine print and don't just get carried away by the interest rate they offer you. You have to ask them for the T.A.E.
In most cases, to offer you the best conditions, the bank "invites" you to contract with them the home insurance, the life insurance, have the payroll with them, hire them a pension plan, etc ... For each of The products you hire will be offered a discount on the interest rate (for example, if you take out life insurance, they give you a reduction of 0.25%).
These products have an added cost and insurance is usually more expensive when contracted with the bank. The T.A.E. is the interest rate resulting from adding the costs of contracting products to the bank to the base interest rate of the mortgage.
To compare mortgages, always use the T.A.E., since each bank will ask you for different conditions to contract the mortgage. The T.A.E. it is the only way to compare pears to pears. Never compare mortgages based on the interest rate offered.
4. Find balance.
The longer the term of your mortgage, the lower the monthly payment. But you should also keep in mind that the longer the term, the greater the amount of interest you will have disbursed. As an example, if you take out a € 200,000 30-year mortgage at 2% interest, you will end up paying € 65,500 in interest.
If, on the other hand, you do it for 10 years, the interests are reduced to € 20,600. We must find a term that allows us to comfortably face the monthly bill, but always trying to keep the term as low as possible.
In mortgages it is very important to search and compare as much as you can. You can save a lot of money!
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