Newspaper Elpais gives a few tips to reduces your 2006 tax bill.

Property to let/rent

  • If the property is rent as a home to live (as opposed to an office) there is only 50 % to pay.
  • If the property is let to young people between 18 and 35 years old, there is nothing to pay.
  • If you want to make improvement into your property for the purpose of renting do it or end it before the end of this year so you will be able to deduce the expense of your work. If the cost of your improvement is higher than your gain from the rent, it will be possible to differ part of the revenue on the coming year thus reduce the next year tax bill.


Buying Properties (assuming you did it with a Spanish bank)

  • Invest everything as much as you can in your mortgage until you reach 9015 euros; vivienda account (cuenta vivienda*) or anticipated payment to the promoter of your future property all that types of spending allow a 15 % reduction.
  • If you bought your property after the January 19, 2006. this is the last year where you can deduce 25% on the first 4507 euros. on a loan, change in the Spain fiscal law will no longer allow the reduction.
  • If you are divorced but pays part of the mortgage of the property in which your ex-spouse live, it is recommend to pay in January 2007, this way you could deduce part of your money.

* cuenta vivienda or Cuenta de ahorro vivienda – it is a financial product offered by Spanish banks, it consist of a saving plan destined to constitute a capital to allow the future acquisition of a first house.


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