Spain : Spanish VAT reduction extended and is on holiday homes

The condition excluding newly-built holiday-homes from VAT reductions appears to have been dropped.

When the Socialist Government introduced a VAT reduction on new homes sold last year, from 8pc to 4pc, the People’s Party, then in opposition, promised to extend the reduction to the end of 2012, but only on primary residencies up to a certain price.

But now that the PP are in power it appears that they have dropped these conditions, which can only be good news for holiday-home buyers looking to take advantage of the crash in Spain’s new home prices.

The decree extending the VAT reduction to the end of the year, published in the official Government bulletin (BoE) on the 31st of December, made no mention of any extra conditions, meaning that VAT on all new home sales, whatever their use and value, will only be charged at 4pc during 2012.

Source Mark, Spanish Property Insight


Lydnem comment


Great news!! All new properties (not registered previously) will only face 4% IVA (VAT) instead of 8% until the end of 2012. This is very good news for the new build properties but also for the market as a whole as it draws attention to it. Dont miss the best properties and best mortgage facilities while they are still available and the Bank of Espana allows the banks to offer high loan to value properties


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