VAT on properties to increase!

The Spanish Government has implemented a series of changes aimed at reducing its deficit, including increases to the current tax rates and elimination of tax breaks which directly affect the housing sector.

From the 1st September 2012, Spanish VAT will increase from 18% to 21%

This new tax rate will apply to:

– commercial units,

– parking spaces & storerooms,

– home refurbishments,

– furniture, electrical appliances and decoration

Property VAT will increase from 4% to 10%!

The reduced property VAT rate of 4% (reduced temporally from 8%) for the purchase of new-build properties in Spain will continue until the end of the year. On the 1st January 2013, this VAT will increase to 10%.