Spain Cuts New Build Property Taxes
Last week, Spain announced a temporary reduction in tax on new-build properties – from 8% to 4% in a bid to stimulate the sale of unsold new properties across the country.
Whilst this is a significant boost for developers wanting to move inventory – some property agents feel that more important issues need addressing first – such as the processing of first occupation licences. Other agents believe the cuts are unlikely to make much difference to sale figures in part due to the generalisation that new build property can be somewhat overpriced in the first place.
The reality is (from our experience at least) is that progress, albeit slow, is being made with regards to getting the Spanish property market moving again – something anyone with an interest in Spanish property is keen to see. Granted, not all new-build property is suddenly going to appear to be a bargain as a result of the tax cuts, but it does mean more new-builds will represent better value for money than they did.
Many new developments for sale are offered with 100% finance – whereas in the resale market this is virtually impossible to achieve unless the property is a repossession and bank owned; subsequently if you shop around for Spanish property, some new –builds now represent a better deal than available resale properties.
The tax cut is only a temporary measure at present, only in place until 31/12/2011.