The luxury property market is proving to be beneficial to the Balearic government. Over the first six months of the year, the finance ministry took in 291.5 million euros of tax from the sale of luxury properties - a record amount.
For properties valued at one million euros or more there is 11% stamp duty. One of the most expensive properties - price six million euros - has therefore brought in 660,000 euros, on top of which are the other costs related to property transfer; the government benefits from these as well.
The 291.5 million represents a 5.6% increase over last year. As an indication of how the tax revenue has increased, in 2013 there were 267 million euros from all sales of property. In six months of this year, one category alone has provided more. Properties worth 400,000 euros attract eight per cent stamp duty, the minimum rate.
The government anticipates total tax revenue to be 866 million this year, which will exceed the previous record of 843 million in 2006. The Partido Popular has been asking the government to reduce taxes but none is envisaged in next year's budget. This said, the government is looking at certain deductions which would in effect amount to reductions.