90 days remaining to save 6% on a new property purchase in Spain

The VAT on the purchase of a new property will rise from the present 4% to 10% on the 1st January 2013.

This tax was originally reduced in 2011 from 8% to 4% by the former socialist Spanish government. This was extended on January 1st 2012 through to the end of this year by the current conservative government. However, VAT in Spain was increased across the board on September 1st and the former 8% VAT has increased to 10%. So the increase jumps from 4%, at present, to 10% next year.

In order to save paying this increase you must complete the purchase of a new property by signing the title deed before a notary prior to 31st December 2012.

What is a new property?

A new property is one that has never been registered to a first owner i.e. that from a developer, builder or even a re-possession from a bank as long as it has come from one of the above situations.

The saving can also be made in such a situation where you are paying for a property in stage payments and where the final payment falls into 2013, by paying all VAT payments (at 4%) in advance and before the end of this year.