BackThe Ombudsman of Spain, Soledad Becerril, has welcomed the fact that the tax reform approved by the lower chamber of Parliament includes recommendations made by the Institution.
Accordingly, it moderates the tax hike on the sale of used homes and keeps in place the abatement coefficients that reduce the capital gains tax on the sale of properties, when the value of the sale does not exceed €400,000.
Meanwhile, the update coefficients that correct currency depreciation disappear. The tax on capital gains for the sale of properties will go up in some cases, with respect to this year’s level.
The Ombudsman began an own-initiative inquiry in October, concerned about the impact that the elimination of the abatement and update coefficients might have on middle- and lower-class tax rates.
The reform, which comes into force on 1st January, also includes two exemptions that the Ombudsman’s Office had sought: it eliminates the tax on the increase in value of urban land (known as municipal capital gains tax) in the event of dation in payment, and exempts the capital gain derived from dation in payment of the main residence.
Another recommendation incorporated by the new tax reform is the one whereby government subsidies and allowances are not declared until they have been received. Hitherto, there was an obligation to pay Income Tax for them when they were recognised, despite the fact that they had still not been drawn.
The reform also takes into account aspects of other proposals made by the Institution, such as putting up personal and family minimum levels (the tax relief for children, dependent elder relatives and disability).
Still pending are matters such as updating the income limit set, in order to be able to benefit from the minimum for an elder relative. To be able to apply this measure, the dependent person must have an income of under €8,000, this being a figure that has not changed since 2002. The slight increase in minimum pensions might lead to this limit being exceeded. That, in the opinion of the Ombudsman’s Office, does not necessarily mean that elder relatives who live with the taxpayer can gain financial independence.
The Ombudsman’s Office will insist on the need to re-establish the deduction for investment in a regular residence when building work is carried out and facilities put in to adapt the home for disability reasons.
Source: Office of the Ombudsman, Spain
