Luxury property in Mallorca

A new tax rate for properties of two million euros and more.

Andrew EdePalma01/10/2022 06:55
TW
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Balearic finance minister Rosario Sánchez will soon present the draft for the 2023 budget, one that can be expected to be "electoral"; elections for the Balearic parliament, island councils and town halls will be held at the end of May 2023.

Discussions between parties of the Balearic coalition government are said to have reached agreement on an increase to property transfer tax, which is applied to the sale of homes. For properties valued at more than one million euros, the tax is due to go up from 11.5% to 12%, while there will be a separate tax rate for properties valued at two million euros and more.

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A proposal from Podemos for an increase in gambling tax has been accepted, but a rise in the tourist tax for high season would appear to be off the table. PSOE, the party of Rosario Sánchez, President Armengol and tourism minister Iago Negueruela, have "dug their heels in" and are rejecting this proposal from both Més and Podemos.

Meetings were held on Thursday, and on Friday the president gave a clear message about differences in approach between parties of the left in government and the main opposition party, the Partido Popular. "Fiscal policy is key to defining political ideology and priorities. We can see where the PP are located and we are at the opposite end." The PP have been proposing a cancellation of the wealth tax for individuals with assets of more than one million euros.

Property transfer tax on luxury homes in the Balearics is already the highest in the country. At 11%, only Catalonia and Extremadura come close. In a majority of regions, it is seven or eight per cent. In Madrid, run by the PP's Isabel Ayuso, taxes are the lowest whatever the value of a property.