New tax hikes in Spain

Selling a property in some regions of Spain became more expensive following new tax hikes.
In what has been described as a “mystifying move”, governments in the autonomous regions of Catalonia and Valencia have increased the levy on buying a resale property to 10%.
At 10%, the tax is now the same rate as VAT on new homes, which the national government increased from 4% to 10% at the beginning of the year.
The Catalan administration hopes to raise an extra €50m from the increased tax to plug its regional deficit, while Valencia is looking to bring in an extra €30m this year, and €75m next year.

The tax applies to all homes whether they are worth €100,000 or €1m.
Spain relies heavily on overseas investors, with foreigners now making up half of the market in Valencia.
“There’s nothing like purchases from foreigners to boost a region. This move will discourage people from buying. Spain should be rolling out the red carpet to foreigners with lower taxes and less bureaucracy.”,
….but…….. vendors have already reduced house prices by 2% to compensate for the tax hike.

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