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INCREASE OF VAT ON PURCHASE OF NEW PROPERTIES IN SPAIN

It is widely known that on 1st September 2012 the VAT in Spain will be increased in the maojority of the commercial and industrial products.

For example:

  • The normal VAT of 18 % will be passed up to 21 %. This will include all the standard services and commercial products, like plumbers, electricians, lawyers, and not protected food and drinks,  etc.
  •  Other services like hotels and restaurants will have an increase of the current 8 % up to the 10 %.
  •  In relation to Properties, the acquisition of New Buildings, which was reduced up to 4 % in 2010, now will be increased to 10 %. But this increase will be done on the 1st of January 2013, and not at the begining of September as the rest of the products. So, acquisitions of properties completed before the end of this year will be still taxed with the 4 % VAT.

Please,pay attention to the fact that the VAT increase will only affect to the purchase of NEW properties. For RESALES, the tax in application is the “Transfer Tax” (Regional Tax), and not the VAT (National Tax).  Transfer Tax will be subjected to each of the regional gouvernments decisions, being, now, 7 % in Valencia Region, Madrid and Murcia, and 8 % regions like Andalucia, or Catalonia.

TLACORP

 

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