The impact of the new value added tax on Spain’s real estate market

September 26, 2010 at 1:14 pm Leave a comment

Residential real estate prices in Spain seem to be falling at a faster rate in recent months as the latest figures show they are down 4.6% over the last 12 months. Figures show that after nine months of slowing down, the decline of prices is accelerating, even if the PM says that housing prices have reached bottom.

Vacation properties and second homes have suffered the most and affected the real estate market on the coast badly.
But sales seem to be doing better. There were concerns that real estate sales would plunge after a rise in VAT on new home sales kicked in at the start of July. But the latest figures from the National Institute of Statistics show there were 38,838 home sales in July, up 15% on the same time last year and 16% on the previous month.

But experts say that these figures issued by the Ministry of Housing are contradictory with the ones registered by the College of Registrars, who inscribe the deeds in the registry, as they say that sales were down 6.3% in the second quarter compared with the first three months of the year.

Unfortunately, it is expected that sales will soar at the beginning of next year because of the new value added tax, prompting a new plunge in sales after these optimistic figures from the first two trimesters.

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Entry filed under: Economy, Housing, News, Real estate. Tags: , , , , , , , , , .

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