5 October, 2011

A 4% Temporary Reduction of Spanish Real Estate Prices – PBS

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 Por: PBS OneWorld

In these continuously changing times, different tax measures are being taken by our Spanish Government in an attempt to reduce the Spanish deficit, which constitutes a priority of our Spanish economic policy. We cannot say that, in the taxpayer’s view, all of these measures have a positive impact but we can still find specific tax opportunities that are worth mentioning.

Our Spanish real estate market, which was the spearhead of our economy not so long ago, has suffered a drastic crisis, thus leading to a high stock of real estate which remains unsold all over our geography. After the housing bubble burst, many unsold homes still sit vacant across the country.

In this context, Royal Decree 9/2001 of August 19 has introduced a temporary measure with the aim of offering a tax advantage in the purchase of Spanish real estate properties. With effects from August 20, 2011 and up until December 31, 2011, (only four months), purchase of Spanish real estate properties that constitute a dwelling unit are subject to a 4% VAT rate, instead of the previously applicable 8% VAT rate.

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