Spain’s Andalusia to scrap wealth tax in bid to attract high earners

The Andalusian government has announced it will scrap a tax which wealthy residents and non-resident homeowners in the region have to pay on their worldwide assets. 

spain andalusia wealth tax
According to Moreno, Andalusia’s impuesto de patrimonio has been “an obstacle for investment”. (Photo by CRISTINA QUICLER / AFP)

Andalusian regional president Juanma Moreno on Monday announced that wealthy residents and non-residents (second home-owners in the region) will no longer have to pay el impuesto de patrimonio, as wealth tax is called in Spanish.

From Wednesday September 21st 2022, Spanish nationals and foreigners who reside in the southern Spanish region or have a second home there, and whose worldwide assets are above €700,000, will receive a 100 percent tax deduction on said wealth tax. 

In other words, they will not have to pay any tax on their assets as is the case in almost all of Spain’s regions. 

The regional governments of the country’s 17 autonomous communities have the freedom to introduce tax deductions (bonificaciones) and asset exemptions as they see fit, but up to now the only region in which the wealth tax was non-existent was Madrid. 

READ MORE:  Why you should move to Madrid if you want to pay less tax in Spain

According to Moreno, Andalusia’s impuesto de patrimonio has been “an obstacle for investment” and he stressed that its cancellation won’t have a major impact overall in terms of tax collection in the region as it only represents 0.6 percent of Andalusia’s yearly tax revenue (€95 million). 

Instead, he argued that it would attract approximately 7,000 new high-earning tax contributors to Andalusia. 

“The aim of this is that certain high earners become residents in Andalusia and thus pay their taxes in the region, as well as making Andalusia the region with the least taxes together with Madrid,” the right-wing leader told journalists. 

Around 20,000 people in Andalusia paid wealth tax in 2021. 

Up until now, taxpayers in Andalusia with their primary residence in the region did not have to include this as an asset in the €700,000 wealth tax calculation if the property was valued below €300,000.

If their worldwide assets still surpassed €700,000, they would have to pay between 0.2 and 2.5 percent on any amount above the aforementioned threshold. For example, if a person’s worldwide assets added up to €750,000, they would pay 0.2 percent tax on €50,000.  

READ ALSO: The new tax laws in Spain’s Andalusia in 2022

The Andalusian leader also announced his government would ‘deflate’ its income tax rates through a process called deflactación del IRPF, which essentially sees this progressive tax factor in the effects of inflation on purchasing power.

Therefore, workers in the region with yearly earnings between €12,450 and €35,200 will pay less income tax.

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Black Friday in Spain: What you should be aware of

Here's what you need to know about the Black Friday sales in Spain in 2022, from when they start to which retailers are offering discounts and why the sales aren't always as good as they're made out to be.

Black Friday in Spain: What you should be aware of

Black Friday is the day when some of Spain’s biggest retailers hold huge sales and give massive discounts (or so they claim) in the run-up to the start of the Christmas shopping season.

The tradition originated in the US as it was held the day after Thanksgiving.

READ ALSO: Where Americans can celebrate Thanksgiving

While Spain doesn’t generally celebrate the American Thanksgiving holiday, it does however go in for Black Friday in a big way, along with many other countries around the world.

Spain began getting in on the Black Friday action in 2011 when the regulations on promotions and sales changed.

When is Black Friday?

This year, Black Friday will be held on Friday November 25th, but many companies and online retailers decide to hold sales throughout the month or even extend them for a whole week instead of just one day.

For example, tech store MediaMarkt began giving discounts on November 1st and will continue its sales until November 30th, while Mr. Wonderful began its discounts early too on November 18th.

Inditex group (which includes clothes stores Zara, Pull & Bear, Massimo Dutti, Bershka, Oysho and Stradivarious) will publish their discounts online on Thursday November 24th.

Many stores will also extend their offers until Monday November 28th, which has become known as Cyber Monday. On this day, more tech companies and online retailers will be offering discounts too.

What will there be discounts on?

There will be Black Friday sales in Spain on everything from fashion and beauty to sports equipment, homeware and technology, among others.

Businesses are also allowing the return periods to be extended until January 6th 2023 or even into February, so that people can start their Christmas shopping early.

Spanish stores such as Mango, Zara and El Corte Inglés will all be having sales, as well as international and online retailers such as Amazon and Primark.

Swedish furniture giant Ikea will be doing something a little different this year, having a Green Friday where they’ll buy back some of your old furniture. 

According to a study by online marketing company Webloyalty, it is expected that online spending will grow by 25 percent compared to 2021, despite the rise in the cost of living and the financial squeeze many are experiencing.

Are Black Friday sales in Spain really that good?

Research conducted by Spanish consumer watchdog OCU over the past seven years has proven that many shops put the prices of their products up before Black Friday, so that the discounts they then apply aren’t really bargains for shoppers, but businesses get to capitalise on the shopping frenzy. 

In 2021, OCU spent 30 days writing down prices for almost 17,000 products in 52 stores. Almost a third of them rose in price (32.5 percent of the products), 11.8 percent of which cost less in the week of Black Friday. Overall, an average price rise of 3.3 percent was calculated.

There’s even a Twitter hastag #timofertasBF ( abit like ‘ripofferBF’) where user post the products that claim to be on discount but really aren’t.

Therefore, when it comes to big purchases in particular, make sure that you’re familiar with the average price of the product before Black Friday by comparing prices online. That should help you to ascertain whether you’re actually getting a good offer. 

If it’s a top-of-the-range product that’s just been released, don’t expect it to be on sale, and if it is, you should be suspicious.

Watch out for Black Friday scams

Be aware that while Black Friday can mean some great bargains, it’s also a day that brings out scammers and people who are waiting to steal your personal details.

In the past, there have been situations where second-hand items never arrive, the setup of fake online stores and discounts that contain malware.

You should particularly look out for phishing scams, where people try to steal your identity or personal details and fraudulent text messages.

Experts agree that there are several ways to protect yourself against potential Black Friday fraudsters including avoiding suspicious links or online shops you’re not aware of, using only official websites, creating strong passwords, not trusting any discounts that seem way too good to be true and using online security software.