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Cifuentes announces string of tax cuts for Madrid region
REGIONAL president of Madrid Cristina Cifuentes has announced a series of tax deductions for residents in and around the capital, including discounts on school expenses for the under-fours.
Income tax – in terms of the part due to the regional government, rather than that which goes to the treasury at national level – will drop from 9.5% to 9%, and discounts will be given on inheritance and donation duties, known collectively as 'succession tax', when the beneficiaries are siblings, aunts or uncles and nieces or nephews.
The various measures will benefit about three million residents in the capital and wider region, who will save around €125 million a year between them.
Sra Cifuentes (PP) says the measures have been made possible thanks to the 'healthy economy' in the region.
She explains that in terms of income tax, the minimum will be dropped to 9% - the lowest in any of Spain's 17 autonomously-governed regions – representing a decrease of 5.3% on the bottom layer, so that those workers with the lowest income will see the greatest benefits as they will save more in proportion to their earnings.
With €56.3m saved in income tax, the Greater Madrid region now has the lowest rates in Spain.
Further reductions and tax breaks are on the cards, such as for those who have elderly relatives or persons with disabilities of 33% or more living with them without charging rent – these people will be able to offset €1,500 a year against their tax bills, rather than the current €900.
To help with the work-life balance for families who do not benefit from publicly-run nursery school places or from the so-called 'kindergarten cheque', or regional government or council grant towards playschool costs, Sra Cifuentes (pictured) has increased the amount of expenditure which can be offset against parents' tax bills.
This applies in respect of children from birth to three years old inclusive who are in nursery school or reception classes – which start at age three in Spain – and will allow families to claim back up to 15% of their costs, subject to a limit of €1,000 per child.
Tax relief of up to 15% can be claimed on donations to foundations which feature in the regional Foundations Register, and investments in shares in new businesses now attract tax discounts of 30% rather than the previous 20%, to a maximum of €6,000, as opposed to the earlier €4,000.
Investment in universities or research centres now attract tax relief of up to 50%, to a maximum of €12,000 a year.
Inheritances, or 'gifts' during life, will attract a 15% tax reduction when the beneficiary is a sibling or 10% when the beneficiary is an aunt, uncle, niece or nephew – deductions which will save inheritors around €32.5m and could benefit up to 10,900 residents.
Tax on property-buying will also come down – when purchasing a main residence up to a purchase price of a quarter of a million euros, duties levied will come down by 10%, and by 95% for large families with three or more dependent children or single parents with two or more.
Assets valued at less than €500 purchased by physical persons will attract 100% tax breaks, although this does not include vehicles.
Purchases of second-hand properties will attract tax at 6%, rather than 11% as is the case in most other regions.
In total, about 34,000 Madrid residents will benefit from the property tax cuts, saving around €18m between them.
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