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The Spanish Government has just approved an 11 point plan to stimulate the economy to make things easier for families facing financial difficulty in the current economic slowdown.
The measures include the helping those in difficulty meeting mortgage payments, to extend the loan at no cost. It’s all part of the 10 billion € packaged announced earlier in the week designed to stimulate the stagnating economy.I’ve added my observations to the 11 measures and am interested in other forum members’ thoughts as to whether you think these measures really will help the situation overall or whether they’re just token attempts.
1: Help for families with mortgage payments by extending the loan at no extra cost.
Will this also apply to British residents with a Spanish mortgage who are also ‘in financial difficulties’?2: Tax reductions, including the famous 400 € income tax rebate for all workers, pensioners and self-employed.
Sounds good.3: The cancellation of Patrimonio or Inheritance Tax, expected to cost the treasury 1.8 billion €. The measure back dated to Jan 1 this year.
Sounds even better. I’m personally against all inheritance tax as we’ve already paid tax on the money we bought the property with in the first place.4: Help in the re-location of the unemployed to find work. This plan has a budget of 21 million €.
Sounds like one of Labour’s schemes that failed miserably.5: Help for companies, with 2 billion in credit for Pyme small businesses.
Tax payers bailing out failing businesses?6: VAT/IVA Payments – Companies can ask for VAT refunds monthly from 2009.
Good intentions, but will it work in practice knowing the go-slow attitude of the ‘system’?7: Assisted housing – new ICO credits of 5 billion, 2 more than previously planned.
Good.8: Public works – new measures to speed up public works tenders and completion.
Same reply as point 6.9: House construction – Plan to build 150,000 assisted or protected homes each year, and to promote energy efficiency in new buildings.
I know where they can find 150,000 homes standing empty without having to ‘plan to build’….10: The renovation of old buildings – When the cost of renovation is more than 25% of the purchase price, tax breaks will be awarded including the return of VAT.
Like this one.11: Foreign Investment – The Government will improve the investment conditions for non residents of Spain.
Well they need to work hard on this one. Would like to see how they intend to do that and will it include property investment as well? -
Posted: Sat Apr 19, 2008 10:51 am Post subject: Sp. Government’s new plan to stimulate economy
Charlie: I have added my comments in block for ease. So I am not shouting.1: Help for families with mortgage payments by extending the loan at no extra cost.
Will this also apply to British residents with a Spanish mortgage who are also ‘in financial difficulties’?IF THEY ARE RESIDENT I.E. NOT A HOLIDAY HOME OWNERS THAN IT SHOULD.
2: Tax reductions, including the famous 400 € income tax rebate for all workers, pensioners and self-employed.
Sounds good.OK, I SUPPOSE IT HELP TOWARDS THE FOOD SHOPING ETC.
3: The cancellation of Patrimonio or Inheritance Tax, expected to cost the treasury 1.8 billion €. The measure back dated to Jan 1 this year.
Sounds even better. I’m personally against all inheritance tax as we’ve already paid tax on the money we bought the property with in the first place.I AM WITH YOU. SPECIALLY PATRIMONIO. IF I HAVE A GOYA HANGING IN MY HOUSE WHICH I HAVE INHERITED FROM MY FAMILY WORTH €40 MILLION, HOW AM I SUPPOSE TO PAY THIS TAX DUE I TEAR OF PART OF THE CANVAS AND SELL IT PIECE MEAL.
4: Help in the re-location of the unemployed to find work. This plan has a budget of 21 million €.
Sounds like one of Labour’s schemes that failed miserably.
HAS TO BE MONITERED.5: Help for companies, with 2 billion in credit for Pyme small businesses.
Tax payers bailing out failing businesses?IN A COUNTRY LIKE SPAIN A LOT OF COMPANY FAIL DUE TO EXCESSIVE PAPER WORK, LACK OF PROFESSIONLISM, ACCESS TO CASH WITHOUT ADDING COST E.G. NORATY FEE ETC.
6: VAT/IVA Payments – Companies can ask for VAT refunds monthly from 2009.
Good intentions, but will it work in practice knowing the go-slow attitude of the ‘system’?AGREE WITH YOU.
7: Assisted housing – new ICO credits of 5 billion, 2 more than previously planned.
Good.SORRY DONT KNOW WHAT IS ICO.
8: Public works – new measures to speed up public works tenders and completion.
Same reply as point 6.
PUBLIC WORK HAS TO PROVIDE LONG TERM SUSTAINBLE JOBS NOT ONLY UNTIL THE PROJECT IS FINISHED.9: House construction – Plan to build 150,000 assisted or protected homes each year, and to promote energy efficiency in new buildings.
I know where they can find 150,000 homes standing empty without having to ‘plan to build’….WE HAVE BEEN HERE, MANY TIMES BEFORE.
10: The renovation of old buildings – When the cost of renovation is more than 25% of the purchase price, tax breaks will be awarded including the return of VAT.
Like this one.WILL THE PERMISSION FOR LISTED BUILDING COME IN TIME, WHO WILL MONITOR THE COST & QUALITY OF THE FINSHED PRODUCT. HOW MUCH WILL BE SPENT ON THE BUILDING AND HOW MUCH WILL GET POCKETED.
11: Foreign Investment – The Government will improve the investment conditions for non residents of Spain.
Well they need to work hard on this one. Would like to see how they intend to do that and will it include property investment as well?NO, ONE WILL INVEST SERIOULY IN A COUNTRY IN THE ABSENCE OF LAW & ORDER, WHERE UTILITIES ARE DISCONNTED BEFORE HAND ANTICIPATING A DEFAULT IN PAYMENT BEFORE THE FINAL DATES.
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When you consider the British government spent 30 billion euros bailing out Northern Rock (just one bank) it makes you wonder just how effective 10 billion will be- spread across 11 activities.
I suspect it will be a preverbial drop in the ocean!
By the time the beaurocrats have delayed these initiatives Spain will have recovered from the credit crunch along with the rest of the world.
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I thought patrimonio was wealth tax 😕 The tax we are paying on assets for residents and non-residents. Just heard it on TV this morning but have not read it in any depth?
Remember the 200 pm month allowance for young people to rent an apartment..seems to have been a damp squid as the landlords have just raised their prices by…yes, 200!
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katy wrote:I thought patrimonio was wealth tax 😕 The tax we are paying on assets for residents and non-residents. Just heard it on TV this morning but have not read it in any depth?
Remember the 200 pm month allowance for young people to rent an apartment..seems to have been a damp squid as the landlords have just raised their prices by…yes, 200!
It is very bitty, in the ABC newspaper today someone is quoted as saying they are trying to fix big punctures with small patches.
With regard to foreign investment in general and property purchase in particular. The cobbler should announce an end to land grab in Valencia and say no demolitions of property will take place until further notice until the whole mess is sorted out.
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A lawyer specialising in construction and planning matters, César Fernández, used to contribute on this forum. He came across as extremely helplful – suggest you try contacting him?
He may be able to help with your questions.You’ll find him on this thread: http://www.spanishpropertyinsight.com/forums/viewtopic.php?t=1707&highlight=cesar
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@mortimm wrote:
Can anyone point me towards more info on the ‘Renovation’ IVA relief?
This is all I can find so far, from the PSOE site:
“En el área de la construcción también se mejora en el tratamiento fiscal de las rehabilitaciones de edificios. Así, las obras realizadas en un edificio se considerarán rehabilitación cuando su coste supere el 25% del precio de adquisición del inmueble, sin incluir, como hasta ahora, el precio del suelo. De este modo, un mayor número de obras se podrá beneficiar de una fiscalidad más beneficiosa, ya que podrán recuperar el IVA soportado, y se estimulará la actividad en el sector de la construcción.”
No mention of dates or timescales.
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