- This topic has 23 replies, 10 voices, and was last updated 11 years, 9 months ago by
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To the best of my knowledge it does. However, some people say it doesn’t. Does anyone have an opinion on this?
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What is a new home ???. I have been told that if a block of apartments has been taken over by the Bank from a developer and later the Bank is selling them. In this case its not a new home even though it has never been occupied.
This kind of confusion gives the Bank the opprtunity to extract an extra 4% & pockecting it, instead of handing over to the Hacienda.
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Yes, see link below:
http://www.elmundo.es/elmundo/2012/01/13/suvivienda/1326444591.html -
Thanks. The same was confirmed by some lawyers I’ve spoken to.
Since then someone has asked the following. Is the reduction retrospective on stage payments? So if you have already paid IVA at the higher rate on stage payments, if you complete tomorrow, will the overall prices be adjusted so that you only end up paying 4% on the total?
Tricky question. I wouldn’t be surprised if the law-makers haven’t even thought that one through 😕
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@katy wrote:
Saw this posted on the andalucia forum and he is a credible poster.
Property transfer tax has been increased to 8%, 9% and 10% depending on the property value. That should certainly help rejuvenate the property market!
Yes. This is true. You can rely on the politicians in Spain to make a bad situation worse.
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@Chopera wrote:
So you pay 4% tax on a new property (like much of the property the banks have found themselves holding) and at least twice that if you buy “second hand” (like all the property everyone else is holding)?
Not only that, but you will struggle to get financing for a resale as banks are only lending on their own properties. That means private vendors will have to reduce their prices even further.
Also, Andalucia just put up ITP (transfer tax) on resales from 7% to 8% (on properties under €400k), making life even harder for private vendors.
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@katy wrote:
Saw this posted on the andalucia forum and he is a credible poster.
Property transfer tax has been increased to 8%, 9% and 10% depending on the property value. That should certainly help rejuvenate the property market!
Correct. 8% up to 400.000€
from 400.000 you pay 9%
after 750.000€ (i believe that is the figure) 10% -
@mark wrote:
@Chopera wrote:
So you pay 4% tax on a new property (like much of the property the banks have found themselves holding) and at least twice that if you buy “second hand” (like all the property everyone else is holding)?
Not only that, but you will struggle to get financing for a resale as banks are only lending on their own properties. That means private vendors will have to reduce their prices even further.
Hi Mark,
I can’t argue that it is harder to get financing, but to say the banks are only lending on their own properties is slightly misleading. For example, 2 deals we have going to completion this month are being financed by 2 different banks. (one buyer is finnish the other spanish), both properties are resales.
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@Fuengi wrote:
Hi Mark,
I can’t argue that it is harder to get financing, but to say the banks are only lending on their own properties is slightly misleading. For example, 2 deals we have going to completion this month are being financed by 2 different banks. (one buyer is finnish the other spanish), both properties are resales.
Granted. I exaggerate but you get the point.
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@Fuengi wrote:
@mark wrote:
@Chopera wrote:
So you pay 4% tax on a new property (like much of the property the banks have found themselves holding) and at least twice that if you buy “second hand” (like all the property everyone else is holding)?
Not only that, but you will struggle to get financing for a resale as banks are only lending on their own properties. That means private vendors will have to reduce their prices even further.
Hi Mark,
I can’t argue that it is harder to get financing, but to say the banks are only lending on their own properties is slightly misleading. For example, 2 deals we have going to completion this month are being financed by 2 different banks. (one buyer is finnish the other spanish), both properties are resales.
I bet the finnish buyer is using his own property back in Finland as collateral?
This is why government regulation never is good. They basicly subsidize one property over another which doesn’t help the situation at all. If I was a spanish tax payer i would be furious over it.
The normal person in this case has two option. Hold firm and not sell his property or sell it with an even further reduced price of 4%. Big corporations can lobby against the goverment very easily which has happened here where as a private person has a much harder time to get their points across.
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@Ardun wrote:
I bet the finnish buyer is using his own property back in Finland as collateral?
No property as collateral.
Good property, good price, good valuation.oh of course he has a secure job and earns a good wage. My point was that banks are lending for non-bank properties. Obviously the lending criteria is stricter than than 5/6 years ago.
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Does anyone think a reduction to 4% (from 7%) will make any difference!!
A collapsing (collapsed) market and a 3 % reduction from costs that are in the region of 15% if obtaining a mortgage.
To cap it off, identical apartments on a complex can and WILL range in price (for example) from 100k to 160K. The former offered by desperate sellers and the latter by developers.
Why would you buy the apartment from the deluded developer at a 3% discount when you can buy from the private seller for a 20%+ discount.
The availability of mortgages for only developer/bank held property has no relevance. I (and I assume most sane people) will hold off until mortgages become available on any property. Otherwise they are openly purchasing a property when it’s neighbour can be had for 50K+ cheaper. I don’t believe many have the mental strength to do that for the sake of purchasing now and not waiting a little longer.
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Now that Spain has asked for a bank bailout, we are under pressure from Europe to eliminate tax loopholes like the super-reduced 4% VAT rate on new homes. There is talk in the press that VAT will go back up to at least the normal reduced rate of 8pc, but could go up to the standard VAT rate of 18pc, or even 20pc.
On a new home costing €200,000, that could put the tax cost up from €8,000 now, to as much as €40,000, at which point sales of new homes would basically collapse (more than they have already done 😯 )
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Looks like the Spanish govenment might also be considering removing the tax rebate they (stupidly) re-introduced 6 months ago:
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