Property Sales Rise for First Time in 17 Months08/10/2012
After 17 months of decline, the number of property sales in Spain experienced a year on year increase in August. Official statistics report 27,708 transactions, 3% more than in August 2011.
Sales in August constitute the first figures since the government announced changes to tax benefits for home purchases that will begin in January 2013. The removal of tax relief appears to have encouraged some buyers to take advantage of the current legislation.
Specifically, Mariano Rajoy’s government announced in July that, as of 2013, those who buy a home will be unable to deduct income tax benefit. Also ending are favourable tax rates for new house purchases, which will increase from 4% to 10%.
For resales, the transfer tax (ITP) with a tax of around 8% is also rising in several regions to 10% in 2013.
The data released by the INE reveals large regional differences for example in Castilla-La Mancha, La Rioja and the Balearic Islands, home purchases have increased by nearly 30%, while in Navarra and the Basque Country there were similar variations but entirely opposite, dropping by up to 30%.
The Nordic countries, with 4.8% of the total, accounted for a significant portion of the total spending growth throughout the country, with Valencia, the Balearic Islands and Andalusia the regions which benefitted most.
Of the remaining markets, Russia again stood out for the month, with a 25% increase in tourist spending.
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