Spain announces temporary tax cut to stimulate new house sales
Madrid, Spain (AHN) – Spain announced it would temporarily lower the rate of the value-added tax on purchases of a new house as one method of trying to increase sluggish home sales .
Finance Minister Elena Salgado announced the government would cut the VAT on newly built housing from 8 percent to 4 percent through the end of the year.
Although house prices have plunged since 2008, a large number of properties that were built within the past few years remain unsold.
Salgado said the government hopes that cutting the VAT tax in half will help eliminate some of the surplus housing stock on the market and stimulate the construction sector, which has high rates of joblessness.
The decision to halve the VAT tax temporarily on new homes was made at a cabinet meeting convened to find ways to stimulate Spain’s economy.
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