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New tax reduction for Madrid property investors from 2016

Great News for Property Investors in Spain. Madrid authorities are still encouraging property investment by reducing tax burdens.

According to a website especialised in economy, the IBI (which is what we call in the Uk the Council Tax ), will be reduced an average of 20% from 2016.

Also, the Plusvalia Tax, the equivalent to Capital Gains taxable to property vendors, will be reduced by a 27% (average). This plusvalia reduction can give a better margin of negotiation when dealing with vendors (with the right approach). Also, if you are investing in order to earn equity, you will enjoy this tax reduction.

These two improvements, which will probably be into force just from 2016 to 2018, confirm that Madrid is the best Spanish destination for property investors because the regional government is reducing tax. Already from the 1st January 2015, the Transfer tax was reduced from 7% to the current 6%.

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When working with overseas investors and dealing directly with Spanish owners, The Spanish Brick has encounter many times that the high capital gains tax has been an obstacle to negotiate prices in different ways. This news will improve the negotiation process in several cases. To know and to understand well the vendor situation is still a key point to get the best possible price. Good communication with Spanish owners is paramount for a successful investment.


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