Tax Changes August 2013

MODIFICATIONS IN THE VALENCIAN GOVERNMENT LAW WHICH AFFECT “INHERITANCE AND DONATION TAX” FOR RESIDENTS IN THE VALENCIAN COMMUNITY ONLY AND WHICH AFFECT “PROPERTY TRANSMISSION TAX AND DOCUMENTED LEGAL ACTS” FOR PROPERTY SITUATED IN THE VALENCIAN REGION. The information has been supplied by Arcea Abogados Asociados S.L. for, and translated by, Susan Bultitude.

On the 6th of August 2013, modifications in the Valencian Government Law came into force, on being published in the Official Bulletin of the Valencian Community (Boletín Oficial de la Comunidad Valenciana), which affect “Inheritance and Donation Tax” (Impuesto de Sucesiones y Donaciones) for Residents in the Valencian Community only as well as “Property Transmission Tax and Documented Legal Acts” (Impuesto de Transmisiones Patrimoniales y Actos Jurídicos Documentados) for property situated in the Valencian Community.

In principle, the changes are as follows:

Inheritance Tax:

- There is an increase in the reduction in the taxable base by relationship of direct family members of the deceased (ascendants, spouse and descendants) and the amount changes from 40.000 Euros up to this date to the new reduction of 100.000 Euros. In the case where the descendants are under 21 years old, and in accordance with their age, their reduction could reach the amount of 156.000 Euros.
- A new autonomic reduction is created for the inheritance of the habitual dwelling of the deceased which improves the national reduction, as this new reduction reaches the amount of 150.000 Euros and the condition of permanence (without a transmission for the acquirer) is reduced from 10 years (national) to 5 years (autonomic).
- The allowance in the quota which was 99% now becomes 75%.
- These changes are for residents in the Valencian Community only.

Donation Tax

- An increase is made in the reduction in the taxable base by relationship of direct family members of the donor and the amount changes from 40.000 Euros up to this date to the new reduction of 100.000 Euros. In the case of those acquirers being under 21 years old, and in accordance with their age, that reduction could reach the amount of 156.000 Euros.
- The allowance in the quota, which was 99% now becomes 75% with a limit of allowance of 150.000 Euros (before the limit was 420.000 Euros).
- The obligation of presenting the Tax Declaration now changes from 30 days (working) to 1 month (natural).
- These reductions and allowances will only be applied to those assets declared by the donor in such a way that those assets which are revealed by inspection, will not enjoy these benefits.
- These changes are for residents in the Valencian Community only.

Transmission Tax.

- For immovable properties: An increase is made in the general rate of 8% in force up to today, to 10%. The rate of 8% is established for determined transmissions of acquisition of a protected habitual dwelling or for the establishment of the main office of PYMES (Small and Medium Sized Companies) and young enterprisers.
- The reduction of 4% is maintained for acquisitions of habitual dwellings for handicapped persons, large families (the procedure is simplified) or for dwellings of special official protection.
- For moveable assets: The general rate changes to 6% and exceptions are outlined regarding vehicles (cars, 4x4 vehicles, motorbikes and motor scooters) which, in accordance with their value, cylinders and antiquity and for recreational boats in accordance with their length and value, have some fixed quotas or if they exceed those premises, they will be taxed at 8%.
For the changes of title ownership it will be sufficient to prove the payment of the tax.
These changes are for property situated in the Valencian Community only.
Documented Legal Acts Tax.
-Changes from 1,2% to 1,5%.
For Property Transmission Tax as well as Documented Legal Acts Tax(Impuesto de Transmisiones y Actos Jurídicos), the obligation of presenting the Tax Declaration changes from 30 days (working) to 1 month (natural).
- These changes are applied for any property, assets, or rights within the Valencian Community.

Jávea – August 2013

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