Andalusia’s Ultra-Low Taxation Attracts Property Buyers
Andalusia, a region in Spain, has become an attractive destination for property buyers due to its ultra-low taxation. The local government, Junta de Andalucía, has implemented a series of measures to reduce several taxes, including those on property purchase, inheritance, wealth, and income. This has made Andalusia one of the areas with the lowest taxation in Spain, comparable only to Madrid. However, unlike Madrid, Andalusia boasts beautiful beaches, making it an easy choice for many.
Benefit from Ultra-Low Interest Rates
The current all-time low interest rates are another reason why now is a great time to buy property in Andalusia. These low rates allow potential buyers to secure affordable loans at a fixed rate. As inflation rises, these loans effectively become ‘cheaper’ as the capital owed to the lender decreases in real terms.
Price Reductions due to Pandemic and Brexit
The Covid-19 pandemic and Brexit have led to an increase in the supply of properties on the market. Many property owners have been forced to sell, giving buyers more options and the ability to negotiate lower prices.
Property Boom in Andalusia
The recent tax cuts in April have spurred more activity in the property market, reducing the surplus supply and leading to an increase in property prices. On average, property prices in coastal areas have risen by 8.4% over the last year. In exclusive coastal areas like Marbella, property prices have surged by over 30% in the last two years.
Protect Your Savings from Increased Inflation
With inflation on the rise, cash savings are losing their buying power. Traditionally, taking on a mortgage loan and investing in real estate has been a strategy to safeguard savings against inflation. This strategy, popular in the 70s, has proven effective in maintaining and increasing wealth.
Profit from Property Rental
Depending on the purchase price and rent controls, the income and capital appreciation from property rental can cover loan costs and still allow for periods of personal use. While Brexit has made this more challenging due to non-deductible costs, for EU citizens and special tax-reduced investment funds, property rental can be a profitable business.
Benefit from the Pound Rally vs. the Euro
For buyers based in the UK, the recent rally of the pound against the euro provides a temporary advantage. Better exchange rates mean more euros, and therefore more property, for their pounds. However, this advantage may be short-lived if the European Central Bank also increases its base rate.
Enjoy Andalusia’s Gorgeous Weather
Andalusia is known for its beautiful weather, averaging 330 days of sunshine a year with an average temperature of 17ºC. This is yet another reason why buying property in Andalusia is an attractive proposition.
Related Articles on Idealista
For more information on buying property in Andalusia, check out these related articles on Idealista:
– Andalusia to abolish inheritance tax in 2019
– Andalusia, now a region in Spain with ultra-low Inheritance & Gift tax laws
– 8 tips to rent like a pro in Spain (Buy-to-Let)
– 8 reasons to buy property on the Costa del Sol (Malaga)
– Andalusia lowers taxes, including Property Transfer Tax and Stamp Duty
– Marbella’s high-end market is booming!
– Andalusia extends its tax breaks on buying property, making them indefinite.
