Reduction in Spanish property tax welcomed

One Spanish real estate expert has welcomed the government's decision to reduce the rate of value added tax (VAT) on new-build homes.

Nick Stuart, managing director of Spanish Hot Properties, was enthusiastic about the 50 per cent reduction on the levy, commenting: "Some agents this summer have been very much on the edge and this news will certainly help them ride the storm out."

He added that the decision "will hopefully spark some movement in the market as new-build properties become more affordable".

Last week, minister of development Jose Blanco announced that VAT on new Spanish housing would be cut from eight per cent to four per cent with immediate effect, with the discount to remain in place until December 31st this year.

The country's economy has been struggling to cope during the global recession, with the most recent figures from the national statistics office showing that gross domestic product increased by just 0.7 per cent during the second quarter of 2011, compared to the same period in 2010.
 

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