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29 August 2011
Recently the Spanish Government's Development Minister, José Blanco has reduced the tax (IVA) on all new properties from 8% to 4% effective immediately until the end of 2011 which will stimulate sales on new property and boost the Spanish economy. The Government has taken a leap to boost the sales of new homes throughout the country. Now with the IVA (equilavent of VAT in the UK) slashed in half, this will come as a huge bonus to potential property purchasers.
Buyers purchasing a property of EUR 200,000 would only have to pay EUR 8,000 instead of EUR 16,000, saving up extra cash to use on furniture or reformations. From now until the end of 2011 we should expect a surge in demand for new property with the main purchasers coming from the UK, Germany and Holland.
This decision has been taken to give futher protection to the banks who have come up against liquidity issues and an over-stocked portfolio of repossessed real estate which remained unsold from when constructors and developers went out of business.
José Blanco indicated that the Government’s fight against the crisis “is being undertaken on two fronts: internal and external. On the external front it is geared towards being more pro-European rather than less. On an internal level, the Government reaffirmed its commitment to the reforms which can be seen through the measures approved by the Government today”.
The Vice-President for Economic Affairs, Elena Salgado, in turn indicated that the measure will have a “positive” net impact on VAT collection from the sale of properties, since revenue from properties that are unsold is “zero”. Furthermore, the sale of properties which are currently in the hands of the financial institutions will allow credit to be freed up.
This decision has been taken to give futher protection to the banks who have come up against liquidity issues and an over-stocked portfolio of repossessed real estate which remained unsold from when constructors and developers went out of business.
José Blanco indicated that the Government’s fight against the crisis “is being undertaken on two fronts: internal and external. On the external front it is geared towards being more pro-European rather than less. On an internal level, the Government reaffirmed its commitment to the reforms which can be seen through the measures approved by the Government today”.
The Vice-President for Economic Affairs, Elena Salgado, in turn indicated that the measure will have a “positive” net impact on VAT collection from the sale of properties, since revenue from properties that are unsold is “zero”. Furthermore, the sale of properties which are currently in the hands of the financial institutions will allow credit to be freed up.
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