Ecovis Global > Foreign investment Spain: Local and regional elections in Spain bring good news for property owners
Foreign investment Spain: Local and regional elections in Spain bring good news for property owners
24. July 2023
Spain held its most recent local and regional elections on 28 May. In some regions where there is more foreign investment in real estate, such as Canary Islands, Valencia and the Balearic Islands, the previous socialist-led governments are being replaced by more conservative parties. These plan to encourage foreign investment.
Looking at recently signed coalition agreements, there is a noticeable trend that will especially benefit natural persons with investments in Spain.
If you plan to restructure investments in Spain, you should wait until the changes planned by the new regional governments are implemented. Christian Koch, Lawyer, Partner, ECOVIS Legal Spain, Madrid, Spain
Inheritance and donation tax: As has already been implemented in Andalusia and Madrid, all three regions plan to significantly reduce or even eliminate these taxes for direct family members.
The Balearics and Valencia (again following the lead of Madrid and Andalusia) have also announced plans to reduce or eliminate wealth tax (Impuesto sobre el Patrimonio) applicable to natural persons with high-value assets located in Spain.
For businesses investing in the tourism sector, the Balearics and Valencia have also announced the intention to eliminate some current restrictions concerning the acquisition and especially the construction of new hotels. They are also planning to eliminate the special tax on tourism in the Balearics and not implement it as planned in Valencia. All three have plans to promote the growth of tourism in their regions.
All three regions have also announced general plans to reduce taxation (although most taxation is regulated by the central government), decrease regulation and generally adopt a more business-friendly attitude towards investors, especially foreign investors. The regional government in Madrid intends to promote specific tax incentives for these investments, as indicated in their election manifesto. This of course is only a general declaration, and the results will have to be analysed after some time has passed.
What companies and individuals should do now
If you are planning on regulating your estate or organising a structure for your family assets etc., it is advisable to wait for some time to see these changes implemented and benefit from them whenever possible, explain the Ecovis experts.