Spain’s new “Pro Property” Gov slashes purchase tax
By Sue Brown, 03 Jan 2012
Spain’s newly-elected centre-right People’s Party is to keep the 4% property sales boosting tax cut introduced by the previous Socialist administration in the last months before the election.
The decision follows warnings last month that investors were concerned about the high costs of purchase in Spain resulting from IVA (VAT) increases a year ago that contrasted with the heavy discounting by banks and troubled developers.
Housing Minister, Ana Pastor promised when she took office last month: “I must make 2012 the year my country’s property crash becomes a good time to buy a holiday home.”
Her first move to boost the market has been to re-instate the 50% tax cut that expired on 31 December 2011. It should enjoy the support of troubled Spanish banks, the property sector and millions of out-of-work Spaniards who could find jobs in a revived construction industry that has been holding back the country’s fragile economy.
There will also be support from thousands of mañana international buyers, many of whom have adopted a wait-and-see attitude during the recession; despite bargain property prices half those on offer in 2007, the last of the decade of property boom years.
Recent research indicates overseas and domestic buyers have been concerned about rising costs of buying after IVA (VAT) hikes in Spain meant they had to find a record 11%-12% of the agreed purchase price. The Spanish Government current “take” is estimated at 9.5% - a massive EUR 19,000 on a typical house sale of EUR 200,000.
- Just hours earlier developers of Ibiza's most prestigious beachfront development announced price cuts in a New Year sales booster move.
IMAGE: Massive savings for buyers at beach front, Ibiza Royal Beach,
Spanish Property News from PropertyInSpain.Net