It was back in August that Spain’s Socialist (PSOE) Government took the unheard of step of slashing the purchase tax on new-build properties by 50%, thus reducing the 8% rate of IVA (VAT) to just 4%. An unprecedented move, the very welcome reduction was, however, originally planned to remain in force only until 31 December 2011, creating a pretty short-lived window of opportunity for buyers.
So, if you thought you’d missed the boat, then you’ll be delighted to hear that Spain’s new Conservative (PP) Government – who swept to power in a landslide victory at the General Election on 20 November 2011 – have extended the IVA reduction on all sales of Spanish new-build homes until the end of 2012.
This means for example that if you’re purchasing a property with a price tag of €200,000, instead of paying the €16,000 IVA previously in force, the tax bill will now only equate to half that amount – €8,000. On a sliding scale, a property costing €400,000 will therefore only mean a tax bill of €16,000 instead of €32,000… and so on.
Just think what you could do with all the money you save!