Tax hikes and deduction changes to cut Spain's public deficit

Automatic summary, not yet reviewed

1. The deduction for buying a main home is eliminated as of January 1, 2013. Taxpayers who already applied it before that date may keep using it in future years.
2. Lottery and betting prizes are no longer exempt and are taxed with a special levy of 20% on the amount above €2,500. It also applies to non-residents.
3. Gains from selling assets held for less than one year move to the general taxable base instead of the savings base. This penalizes short-term speculation.
4. The requirements for SOCIMISOCIMI A listed company that invests in urban real estate to rent it out and distributes profits to its shareholders., listed companies that invest in rental real estate, are relaxed. They pay 0% corporate tax if they meet the conditions.
5. Companies and self-employed workers may voluntarily update the book value of their assets by paying a one-time 5% levy. This is the so-called balance update.
6. The Wealth Tax is extended through 2013. From 2014, a 100% reduction of the tax bill is planned.
7. A new tax is created on deposits held by credit institutions. Its rate is set at 0%, but the State Budget Law may change it.
8. The minimum tobacco tax rises: cigarettes pay at least €123.97 per 1,000, and the minimum for cigars and rolling tobacco also increases.

Who it affects

• People who bought a main home before 2013: They can keep applying the home purchase deduction if they already used it; those buying from 2013 on will not have it.
• Lottery and betting winners: Prizes above €2,500 are taxed at 20% on the excess.
• Companies and self-employed workers: They may update their balances paying 5%; large companies face limited deductible depreciation in 2013 and 2014.
• Banks and credit institutions: They are subject to the new deposit tax and must file self-assessments and advance payments.
• Smokers: Tobacco prices rise due to the higher minimum tax on cigarettes, cigars and rolling tobacco.

Words worth knowing

Deducción por inversión en vivienda habitual

An amount subtracted from income tax for those who bought or built the home they lived in.

Gravamen especial

A specific tax applied separately to a particular type of income or prize.

SOCIMI

A listed company that invests in urban real estate to rent it out and distributes profits to its shareholders.

Actualización de balances

An upward revision of the book value of a company's or self-employed person's assets to reflect price increases, paying a small tax for it.

Amortización

An annual expense companies deduct from profits to reflect the wear and tear of machinery, buildings and other assets.

It summarizes the law as published in the BOE. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries