The lower house of the Spanish Parliament (Congreso de los Diputados) approved on 20 November 2014 the fiscal reform that will come into force on 1 January 2015 and that it was subject of research in the previous entry of this blog.
Finally it was accepted the amendment presented by the Government party group in the Senate which, albeit very lightly, softened the increase in taxation on the sale of properties by maintaining the abatement coefficients up to a maximum of Euros 400,000 per tax payer in the sale of properties acquired before 1995.
The main disadvantage for vendors of properties as of 1 January 2015 lies in the abolishment of the indexation coefficients used so far to include the inflation when calculating the taxable gain and which managed to adapt the acquisition cost of properties to the time in which they were sold.
As analyzed in our previous publication, the abolishment of these coefficients will result in an increase of the tax bill to pay by the sellers of real estate. Furthermore, the larger the number of years the property has been part of the seller´s estate, the higher the tax amount will be.
We therefore encourage all owners who may be negotiating the sale of real estate to try to close the deal on or before 31 December 2014. As from 1 January 2015 they will have a higher tax to pay.
Luis M. Vicente Burgos
VICENTE & OTAOLAURRUCHI ABOGADOS
