Andreu Mas-Colell, the counselor for the economy in Catalonia has announced that Capital Transfer Tax on the purchase of resale property in Catalonia will rise from 8% to 10%.
This measure will come into force on the 1st of August of this year (2013) and is aimed at increasing the revenues from this tax by 150 million euros annually.
One of the ways that Mas-Colell justified the rise was that the tax was below the level of VAT (10%) and of the rates of similar taxes in other regions in Spain.
There are some important concessions, the lower rate of between 5-7% will be maintained for large families, buyers under 32 years of age, the disabled and purchases of listed property (Vivienda de Protección Oficial).
Mas-Colell has assured taxpayers that there will be no further tax changes until the next budget.
Andreu Mas-Colell, the Catalan counselor for the economy
No wonder he has his head in his hands. He has quite possibly just managed to choke property resales in Catalonia even further. I understand perfectly well that not only Catalonia but the whole of Spain needs to raise taxes to cover a colossal funding deficit but to place even more taxes on property which is still moving relatively (and I do say ‘relatively’) well in the region seems daft, absolute madness.
It is not a clever move. Spain desperately needs to reduce property taxes now, not put them up. In the short run it might reduce sales, and hence tax revenues. In the long run it will reduce prices by a corresponding amount, so vendors will get less at the expense of the Government.
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