The new Spanish Prime Minister, the Conservative, Mariano Rajoy has taken the reins of the country in an attempt to straighten up the economy, and in particular, the property market, which is the cornerstone of the economy. The new housing policy which Rajoy wants to enlarge, will be focused on tax relief from property transactions and V.A.T. reductions. Also, Spanish experts have adviced that the new Government should address Tax exemption for REIT (Real Investment Trust).
Tax relief on property
If you are a tax payer registered in Spain and resident in Spain you will probably get an annual taxation reduction from your new property, as long as Rajoy keeps his electoral promise of bringing back this fiscal measure. This will improve the landscape for property investors and home buyers moving to Spain who will have to spend less cash.
Buy To Let Investors
As a second measure that is welcome, is for buy-to-let investors. The new Prime Minister will set about making the legal framework more flexible in the rental market, in order to protect landlords and owners against tenants who are late with their rental payments or who won’t pay.
In order to help Banks with toxic assets, a relevant action that Rajoy will back in full, is the founding of a “bad Bank” (Banco Malo) in order to gather all the toxic assets of Spanish Banks into a “sub-prime” Bank. This will hypothetically help Banks to clear their balance sheets.
Property sales still going down
On other matters, the number of property transactions in Spain declined by a worrying 31.9% during Q3/2011 compared with the same period in 2010. A total of 84,852 sales were completed, which is the lowest figure since 2005 according to the Colegio de Registradores de la Propiedad.
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