Madrid will return 20% of investment made by new residents

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The government of the autonomous community of Madrid will launch a tax incentive that allows foreigners to put money in the region and receive 20% back of the amount invested.

There is no minimum amount required and it can be financial, with investment in stocks or bank funds, placed in a company or in the purchase of real estate, such as an apartment.

The 20% return will be made indirectly: through the annual income tax, in which the investor will deduct this amount. If you have already paid month by month, there is a return, as in Brazil.

This deduction can be made in full in the first year, if the person has such a volume of income tax in one year. If you don’t have the discount, it can be done year by year for the next year.

The condition for this, however, is that the person moves to the Community of Madrid and has their tax residence here. It goes for anyone who hasn’t lived in the country in the last five years — even if you’re Spanish.

The Community of Madrid is one of the 17 states of Spain, here called autonomous communities. Madrid comprises a region around the capital that encompasses 179 municipalities.

“In the case of financial investment, it will not be an essential requirement that it be made in the Community of Madrid. However, the properties must be located in the region”, said the secretary of economy, finance and employment of the Community of Madrid, Javier Fernandéz-Lasquetty, in this Tuesday (17) to international correspondents from several countries, such as France, Germany, Portugal and Brazil.

Fernandez-Lasquetti told Sheet that the new tax incentive program does not facilitate obtaining passports or residence visas. “These procedures need to be done in the usual way, at consulates or embassies,” he explained.

The Ministry of Foreign Affairs of Spain, in turn, has been offering the so-called residence visa for investors for years. In this case, however, there are minimum investment limits: €500,000 (R$2.75 million) for the purchase of a property or €1 million (R$5.5 million) in financial investments or as a partner in a company.

If you move to Madrid, foreigners will be interested in knowing the progressive income tax rates in Spain. They start at 19%, for those who earn up to around €1,000 (R$5,500) a month, and reach 47%, if you are the lucky one who earns more than €25,000 (R$138,000) every 10th day.

According to data from the Madrid government, foreign investment in the region exceeded €20 billion in 2021. [investimento estrangeiro] than Chile and Colombia together,” said the secretary. For every billion that arrives, the regional GDP increases by €886 million, generating 12,400 jobs and another €124 million in tax collection.

The new incentive program to attract funds from abroad now follows bureaucratic procedures and should be in effect as of March.

According to the governor (president is the name of the position) of the Community of Madrid, Isabel Díaz Ayuso, said recently, the measure intends to attract “new Madrilenians who come to live with us and that their families are assisted in the best public health in the country, in an education of quality, with exceptional public transport and security in an inclusive and plural region”.

Ayuso is part of the right-wing Conservative People’s Party. A few days ago, when talking about the incentive, she took the opportunity to pin the leftist president of Spain, Pedro Sánchez, who is from the Socialist Workers Party.

“[Quero] convey a clear message to the international investment community that in Spain there are institutional counterweights and an alternative to this central government. There is a future here, in Madrid, of course, and in a few months, after the general elections, across Spain”, he stressed.

These elections will take place in four months’ time, when deputies and senators will be chosen, who, in turn, will nominate the country’s new president.

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