Seleccion de Links
Spanish Government reduces VAT on New Property Purchases by 50%.
In an unexpected move on Friday of last week, the Spanish government decided to slash VAT on the purchase of new property from 8% to 4%. Applicable immediately, this discounted tax measure will last until the end of the year -31st December 2011.
A brand new property purchased in the next four months, say for example, at 150,000€ will now only pay 6000€ in VAT as opposed to 12,000€. In this case, a saving of 6000€.
The tax break is only applicable to brand new property; the 7% ITP/Transfer tax’ on ‘second hand’ property remains unchanged.
To check costs and taxes when purchasing Spanish property please click here.
The move is clearly designed to incentivise purchases in what remains of 2011 and provide a general stimulus to struggling property developers coupled with greater activity on behalf of financing banks.
The Economy Minister, Elena Salgado, has described the decision as “exceptional and ‘of the moment’”. Friday’s move to slash VAT comes after only 13 months when the government increased VAT on new property purchase from 7% to 8%.
The move is expected to have a positive effect on the national coffers, which at the very least means a doubling in the volume of sales transactions. Jose Blanco, the Government spokesman and Minister for Public Works said the measure would reactivate the sector in line with the requests from banks and promoters for initiatives to facilitate transactions and credit.
The tax break will come as a shot in the arm to many Property developers who are now offering discounts of between 20% and 50% on their unsold stock, there are an estimated 54,000 unsold brand new properties in the province of Malaga alone.
Although there have been a few success stories over the crisis, with some developments selling out after slashing their prices, there is clearly still further room for improvement.
The volume of Spanish nationals purchasing new homes has seen a drop off in the last six months, with many commentators laying the blame at the removal of Mortgage tax relief, which came into effect at the beginning of the year. However, there may also be light at the end of this particular tunnel. The Partido Popular (akin to the English Conservative party) widely expected to regain power in the upcoming November elections, have promised to reinstate the tax relief, even backdating it.
In short, the initiative will be welcomed by buyers who will see a clear reduction in their purchase costs, developers who will sell a lot more stock and banks who will be financing more new property purchases.
23.08.2011
The newly elected Partido Popular (Conservative) party has introduced a raft of measures relating to the under-performing property market. These measures are directed both at stimulating certain sectors of the market and generating extra tax revenue.08/01/2012
In an unexpected move on Friday of last week, the Spanish government decided to slash VAT on the purchase of new property from 8% to 4%. Applicable immediately, this discounted tax measure will last until the end of the year -31st December 2011.23/08/2011
Many commentators have been looking to call the bottom of the market after the turbulence of the last 3 years and it would now appear that we are there or thereabouts.....19/11/2010
Tinsa, a Spanish property valuation company used by several high street banks,has signalled that house prices will drop a further 20% over 2009. 01/03/2009
The Euribor, which is linked to the Central European Bank's base lending rate, is set to close the month of December at 3.47%.28/12/2008
Situated in the prestigeous Marbella location of Cabopino. Standard prices were from 450,000€ - 515,000€. These marvellous luxury homes can now be purchased for 350,000€ - 415,000€. 28/06/2008
Against the trend of bad news in the financial markets, the Euribor fell again to 4.381% (22.01.08). This is well below the rate at the end of 2007 where the rate had spiked to 4.79%.28/01/2008
Despite starting the year well with property prices rising in all Spanish regions,2007 has ended in December with prices 0.28% below where they started in January. According to Facilisimo.com, the region of La Rioja has been the worst affected, dropping 11.08% to 2159€/m2 , Madrid and Barcelona haven't avoided the falls dropping 2.38% to 3479€/m2 and 3.05% to 3777€/m2 respectively. 05/01/2008
The Euribor, the Central European Bank's base lending rate, is set to close the month of November at 4.60%.29/11/2007
Situated in the prestigeous Marbella location of Cabopino, these high quality south facing residences boast fantastic sea views. Golf lovers can also choose south west facing homes overlooking Cabopino Golf (Par 71). Standard prices were from 450,000€ - 515,000€. These marvellous luxury homes can now be purchased for 350,000€ - 415,000€. 06/09/2007
The Euribor, the Central European Bank's base lending rate, is set to close the month of October at 4.65%.12/07/2007
Resale property prices have fallen for the third consecutive month in thirteen Spanish regions including the province of Malaga.12/07/2007
The Deutsche Bank have issued a report on the Spanish economy entitled Spain 2020, the success story continues.12/07/2007
Fantastic new property investment just released in the Dominican Republic. This product, previously only available to the Spanish investment market is now available through Garratt Homes.12/07/2007