The VAT on the purchase of new homes in Spain will rise from 4% to 10% from January 2013

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The VAT on the purchase of new homes in Spain will rise from 4% to 10% from January 2013:

The government will abolish the income tax relief for the purchase of new homes from January 1, 2013, when the rate of VAT on these transactions will no longer be the 'super reduced' rate of 4% and will be at 10%.

This was announced by Minister of Finance and Public Administration, Cristobal Montoro, in a press conference after the Council of Ministers approved the tax package that includes these two initiatives.

As explained by Mr. Montoro, from January 1, 2013 "the relief for the purchase of a new home shall be suspended," a suppression that occurs just a year after the current government regained it.

Also, the finance minister said that the application of the 'super reduced' VAT to 4% for the purchase of new homes "had an expiration date," also scheduled for the end of the year. "Therefore, from January 1, 2013, the transactions for the purchase of new properties will apply the reduced VAT rate of 10%," he said.

• By Surestates
• Marbella and Costa del Sol Property News.
• 1 Jan 1970