2. Spanish Property Law
For the most comprehensive analysis of
Property Law in Spain written in English go to:
Spanish Property Law
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3. Income Tax Deductions in Spain
There are 17 autonomous communities or regions in Spain
and each has competency to regulate tax exemptions and
deductions within it’s territory.
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4. Income Tax Deductions in Spain
However, the central state government also regulates income
taxes.
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5. Income Tax Deductions in Spain
Both systems work together in a complex arrangement that
means that taxpayers pay a proportion of their taxes to the
central government and the remainder to their local
government.
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6. Income Tax Deductions in Spain
So when we refer to a tax deduction available in a particular
region, this may not be the whole story.
Additional deductions, with different qualifying criteria, may
also exist at a state level.
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7. Income Tax Deductions Madrid
If you have dealings with property and pay income tax in
Madrid then you may be in line for a tax break.
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8. Income Tax Deductions Madrid
Local tax laws in Madrid are enacted by the regional
parliament in Madrid City with the most important provisions
contained in Legislative Decree 01/2010.
The most important deductions available are as follows:
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9. Mortgage Relief Principal Private Residence
In addition to the deductions available at the state level, a
deduction of 4.95% may be made on an investment in a
private personal residence with a maximum tax base of
€9,040.
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10. Mortgage Relief Principal Private Residence
This deduction applies equally to the refurbishment of a
property to make it appropriate for the use of a disabled
person.
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11. Mortgage Relief Principal Private Residence
If the property is new then an extra deduction of 1% may be
applied.
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12. Mortgage Relief Principal Private Residence
Where a mortgage is used to purchase a property destined
to be the principal private residence of the taxpayer then a
deduction may be made where there is an increase in
financing costs due to fluctuations in interest rates
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13. Mortgage Relief Principal Private Residence
The rebate is calculated by having reference to the
difference in the Euribar 1-year interest rate as of the
current fiscal year and the same rate in 2007.
The maximum income to qualify for this deduction is
€25,620 (for individuals) or €36,000 (if joint declaration)
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14. Renting the Principal Personal Residence
A taxpayer under the age of 35 may deduct 20% up to a
maximum of €840 annually if they rent their primary
personal residence
The amount paid in rent must be equal to or greater than
10% of the income of the taxpayer
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15. For the Purchase of a New Home
Those taxpayers currently entitled to a deduction for
purchase of a primary residence may add a further 1%
deduction where:
The property is new
(This deduction may not be applied to renovations etc)
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16. Purchase of the Principal Private Residence
There are no deductions for the purchase of a standard
principal private residence in Madridand accordingly it is
necessary to check-out those available at the state level.
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17. For more information or assistance with legal or tax
matters from our network of local English-speaking
property lawyers in the Madrid, go to:
Property Lawyers in Madrid
Source AEAT
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