2021 tax plans approved by Senate

The Senate approved the 2021 Tax Plan package on Tuesday. This means that several tax rules relevant to notarial services will change next year. These include transfer tax, a reduction in corporate tax, and changes to the Box 3 levy.

Starting in 2021, homebuyers under 35 will pay a one-time exemption from transfer tax. The condition is that they will live in the property themselves. From April 1st, the additional requirement applies that the property may not exceed €400,000. For notaries, the Transfer Tax Differentiation Act is divided into two phases: the first phase involves a written statement and a prescribed text in the deed. The second phase, which begins on January 1, 2022, involves a tax return notification.

Corporate tax
The 2021 Tax Plan package also includes an increase in the labor tax credit: working will become more rewarding. According to the Ministry of Finance, both employees and the self-employed will benefit from this. Furthermore, the general tax credit will increase by €126, and the basic income tax rate will decrease from 37.35 to 37.10 percent. More SMEs will pay the lower corporate tax rate starting in 2021: the lower rate of 15 percent will apply to profits up to €245,000, instead of €200,000.

Change in box 3 levy
Savers and small investors with assets up to €50,000 (or €100,000 with a tax partner) will no longer pay tax on those assets starting in 2021. This will reduce the number of small savers and investors paying Box 3 tax by almost 1 million. The tax rate on the non-exempt portion of Box 3 assets will increase slightly from 30 percent to 31 percent.