Sun, sea, and tax savings: Costa del Sol property investment soars as wealth tax vanishes

Investing in property on the Costa del Sol has become even more attractive in 2024, largely due to the region’s status as a favourable tax haven for expatriates.

A significant change is the abolition of wealth tax, which previously applied to both residents and non-residents with global assets exceeding €700,000.

This removal of wealth tax barriers has particularly encouraged high earners to explore property purchases and potential permanent residency in the area.

This shift is significant for prospective buyers, especially when combined with various other tax advantages available in the region.

These include minimal inheritance or gift tax obligations, investment income tax rates, and capital gains tax rates ranging from 19 per cent to 26 per cent.

Additionally, private pensions receive favourable treatment as investment income.

Furthermore, recent updates to the Model 720 form, which requires a declaration of overseas assets exceeding €50,000, have improved transparency and alleviated concerns about potential fines.

Previously, failure to file or incorrect filing could result in substantial penalties, sparking criticism for burdening expatriates unfairly.

However, following a ruling by the European Court of Justice, fines have been revoked, and the associated penalty regime has been revised with immediate effect.

Consequently, individuals contemplating property investment in the Costa del Sol can proceed with confidence, knowing they are free from the threat of punitive fines.