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VAT reduction on new-build Spanish property maintained for 2012

Author: Carolyn Mowlem  |  January 12th, 2012

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VAT reduction on new-build property maintained for 2012It 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!

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  1. Lot of news says that houses and property prices increases nowadays. That VAT reduction, half of the cost is still applicable today? Many buyers are looking for new properties and would grab that good news.

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    • Carolyn Mowlem June 15, 2012 10:33 am

      Yes Eunice, the 50% VAT reduction on new build properties in Spain remains in force until the end of 2012. Great news indeed!

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  2. Lot of news says that houses and property prices increases nowadays. That VAT reduction, half of the cost is still applicable today? Many buyers are looking for new properties and would grab that good news.

    VA:F [1.9.7_1111]
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    • Carolyn Mowlem June 15, 2012 10:33 am

      Yes Eunice, the 50% VAT reduction on new build properties in Spain remains in force until the end of 2012. Great news indeed!

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