I’ve been reading reports that the PP are proposing to cut income tax next year (an election year) and part-finance it by completely removing desgravación. Desgravación is the tax rebate people were given for paying off their mortgage – you could pay back up to about €9000 each year and the government gave an income tax rebate on that amount. The PP got rid of desgravación on new purchases at the end of 2012, but they kept it for properties purchased prior to that date. Now they want to remove it altogether. I think many people, including me, have been put off moving house because we’d lose the rebate and also because we’re on older and better mortgage deals than what is available now. However if desgravación does disappear completely and the available mortgage deals continue to improve, then there’ll be less reason to hold off moving house. It might free up the market a bit more.
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