IVA on new homes rising from 4pc to 10pc next year

The Government has confirmed that IVA (value added tax) on new homes will go up from 4 percent to 10 percent at the start of next year.

Spain desperately needs to sell a glut of new homes, and nurse it’s battered construction industry back to health, so what does the Government do? The one thing most likely to achieve the opposite, namely raising the cost of buying new Spanish property by increasing IVA from 4 percent to 10 percent, adding tens of thousands of Euros to the average new home purchase from the beginning of next year.

I wrote about this issue a couple of weeks ago, but at that stage it wasn’t clear if the Government was going to raise IVA on new homes or not, having raised it on pretty much everything else, including home refurbishment from 8 percent to 21 percent, ensuring that from now one everyone will pay for home refurbs in cash.

The Government has also gotten rid of mortgage tax relief on primary residencies, and according to analysis by Idealista.com, a property portal, the price of new primary residencies will have to fall an additional 10 percent to 20 percent if buyers are to avoid having to spend more money on a home purchase.

Source: Spanish Property Insight

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