Insight into the Spanish property market, guides to help you make informed decisions, and a directory of real estate professionals and home service providers from a source you can trust.
This is a website for buyers, owners, and sellers of property in Spain, offering reliable information and resources to help you get things done with confidence. It is run by Mark Stücklin, author of the Spanish Property Doctor Column in The Sunday Times (2005-2008), and the book ‘Need to Know: Buying Property in Spain’ published by Collins.
When you buy or sell property in Spain the sums of money are large, perhaps one of the biggest financial decisions of your life. The high transaction costs you will face like taxes and commissions only make the decision more important to get right. And when you own property in Spain you face a host of extra challenges to manage, and costs to control. Unfortunately, the Spanish property market is opaque and full of pitfalls, and notoriously unprofessional. Buying and selling property in Spain is not a decision to be taken lightly, and you may find it much easier to buy than sell if you don’t take care. In this market it is crucial to do your own research, and don’t rely exclusively on people who are trying to sell you something – let’s just say they might not have your best interests at heart. Spanish Property Insight is the only independent source of information and analysis of the Spanish property market. Don’t even think about buying or selling property in Spain without subscribing to Spanish Property Insight.
The Government is praying the temporary measure will help mop up the glut of new homes for sale before the General Election in November.
VAT on new homes will be slashed from 8pc to 4pc for the rest of the year, José Blanco, Minister of Public Works and Housing (pictured above), announced this week.
The VAT reduction will only apply to sales of new homes that take place before 1 January 2012. Someone buying a new home for 200,000 Euros before the end of the year from a bank or developer will pay 8,000 Euros less in VAT.
Resale properties will not benefit because they do not incur VAT. Anyone buying a resale from a private vendor will continue to pay a transfer tax of 8pc, rather than VAT at 4pc.
However, at least one savings bank – Catalunya Caixa – has announced that it will also offer a 4pc discount on all its resales (repossessed homes) between now and the end of the year. Others banks are expected to follow suit.
Objective: Zap the Glut
The Government’s stated objectives with this latest measure are to help reduce the stock of new homes for sale, giving the construction sector a boost and stimulating employment.
According to José Luis Rodríguez Zapatero – the Prime Minister (pictured below) – “if it wasn’t for the construction sector, the Spanish economy would be growing at 2pc. All the jobs lost today are in construction.”
Elena Salgado, Minister of Finance, said the reduction in VAT will be “sufficient to reduce the stock of homes.”
As recently as July last year, the Government increased VAT on new homes from 7pc to 8pc in an attempt to increase revenues and reduce the budget deficit. This is a U-turn that hardly covers the Government in glory.
If the fall in VAT does anything to stimulate the market it will only benefit those with new homes for sale, principally developers. As a result, private vendors will find themselves under further pressure to reduce their asking prices.
The opposition Popular Party has promised to extend the rebate for an extra year if it wins the general election in November.
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