Tax advantages for foreign buyers in Alicante: an incentive to invest in real estate

Alicante, this enchanting province on the Costa Blanca in Spain, offers many advantages to foreign buyers looking to invest in real estate. In addition to the pleasant climate and beautiful landscapes, Alicante also offers attractive tax advantages to encourage foreign investment. In this article we will examine in detail the different tax advantages that foreign buyers can benefit from in Alicante and use concrete examples to illustrate their financial implications.

1. Specific tax regime for non-resident tax residents:

Non-tax residents in Spain can benefit from a special tax system with progressive tax rates ranging between 19 % and 24% depending on income.

For example, if you are a foreign buyer and receive rental income in Spain, you will be subject to these tax rates. This allows you to plan your income and expenses based on these preset tax rates.

2. Advantages of the purchase cost deduction:

Foreign buyers in Alicante can deduct certain costs related to the purchase, such as notary and registration fees, from their tax base.

For example, if you buy a property in Alicante worth 200,000 euros, the notary and registration fees can be around 10,000 euros. You can deduct this amount from your taxable income and thus reduce the tax payable on your income.

3. Reduction in capital gains tax:

Non-resident tax residents benefit from a reduction in capital gains tax when selling real estate in Spain. Currently, the tax rate is 19% for non-resident tax residents, while for Spanish tax residents it is between 19% and 23%.

For example, if you buy a property in Alicante for 300,000 euros and sell it a few years later for 400,000 euros, you will be subject to a capital gains tax of 19% of the profit achieved, i.e. 19,000 euros. This represents a saving of 4% compared to tax residents in Spain.

4. Tax benefits for real estate investors:

Foreign buyers who want to rent out their property for tourist purposes can benefit from attractive tax advantages. For example, you can deduct rental-related expenses (e.g. management fees, maintenance and advertising costs) from your rental income.

This deduction reduces the tax payable on rental income, which increases the profitability of the real estate investment.

5. Tax treatment when purchasing new goods:

Foreign buyers investing in new properties in Alicante may benefit from reduced tax rates or certain tax exemptions.

For example, some government programs offer VAT discounts of up to 50% for the purchase of new properties. This means that foreign buyers can achieve significant savings on acquisition costs.

6. Residence regulations for foreign buyers:

Alicante also offers a tax residency scheme for foreign buyers investing in property in the region. This arrangement allows non-resident tax residents to benefit from favorable tax treatment.

For example, if you become a tax resident in Spain, you can avoid double taxation and benefit from certain tax advantages, such as: B. Tax reductions for income from foreign sources.

Conclusion:

Investing in property in Alicante not only offers the opportunity to own a property in a stunning area, but also benefits from attractive tax advantages for foreign buyers. Whether through a specific tax system, purchase price deductions, capital gains tax reductions, tax advantages for investors or a tax residency scheme, Alicante offers a range of incentives to encourage foreign investment. These benefits can not only reduce the tax burden but also increase the profitability of your real estate investment. Remember to consult a legal and tax expert to receive personalized advice and make informed decisions for your real estate investments in Alicante.