The current time is a particularly good moment to buy property in Sotogrande, so if you’ve been contemplating a purchase now is the moment to strike.
The property market in the Sotogrande area is picking up steadily, yet there are still some really fantastic properties at very low prices out there. There is a significant increase in demand and most buyers are thinking, that if they don’t snap up these opportunities now, there is most probably someone else like them, who will. What’s more, the last quarter of the year sees the final period of incentives brought in to help stimulate the property market. These tax reductions that have been in effect for some time now will come to an end soon, only being valid until 31 December 2012. So the rush is on to complete purchases before the end of this year.
Save 6% on purchase tax for new properties.
This means that until the end of the year the lower IVA (VAT) rate of 4% will apply on new properties. After 1st January 2013, the IVA (VAT) rate applicable to property purchases will rise to 10% – so people who buy between now and the end of December save 6% on the purchase price.
It amounts to a saving of €12.000 euros on a purchase of €200.000, becoming increasingly significant the higher the value of the property. In the case of a €1 million euro villa, therefore, you would be saving €60.000 if you bought in December rather than January, so for many already thinking of buying it will prove an important deciding factor to go ahead with a purchase.
Save half on capital gains tax (C.G.T)
There is a also a temporary reduction to capital gains tax (CGT). The incentive introduced was to grant all purchases of Urban Properties in Spain, that are not or cannot be considered your primary residence in Spain, a 50% reduction on any future Capital Gains Tax. This incentive is only valid for purchases that complete between May 2012 and 31st December 2012. Assuming no changes to the basic rates of CGT in the future, for non-residents the rate therefore drops from 21% to 10,5%, while residents see the normal range of 21% to 27% halved to 10,5% and 13,5% respectively.
In other words, any urban property that is purchased as a second home or investment property between now and 31 December 2012 will not be eligible for the full CGT or ‘Impuesto Sobre la Plusvalía’ on the profit made when you come to sell it in the future. Given the very low level of property prices at the moment, a capital gain of €100.000 or more could easily be made in the coming years, and the tax saving on such a profit could amount to €10.500 – €13.500 depending on your residency status.
In all, it makes a strong case for buying a property on this side of the New Year’s watershed, so for those of you who have have cash in the bank and want to make a sound and secure investment and are thinking about buying a property in Sotogrande or indeed the rest of Spain, the most opportune moment has certainly come. If you are looking for signs indicating the right time to buy, I don’t think this one can be any clearer. The time to buy is NOW.
By Jackie Cruz - Manifesto ·