Post by mdshamiul777 on Feb 11, 2024 23:29:08 GMT -5
The takeoff of the real estate sector and the threat of a VAT increase on the purchase and sale of homes?
It seems beyond a doubt that this year 2014 is marking a turning point with respect to the most acute moments of the crisis, forming part of the usual conversations among those of us who work in this sector. Factors such as the Vietnam Email List increase in transactions , the stabilization in the evolution of housing prices , the number of new homes started or the evident reactivation of land purchase and sale operations, are clear indicators of a change in trend .
Already at the beginning of this year, studies [1] suggested that we are close to closing the existing gap in the valuation of housing prices (supply vs. demand), which will lead to the inflection point. Factors such as the absorption of excess supply (including SAREB's important portfolio) and the evolution of demand (improvement in the flow of bank credit and the level of employment) will be key in the early confirmation of the signs of stabilization, at the once the sustainability of the process is ensured.
Given this panorama, the European Commission for economic affairs recently surprised. In its latest report, the Community Executive recommends that Spain, among other measures, restrict the application of reduced VAT and exemption cases. Remember that at the level of fiscal policy, our country still has room to improve the budget deficit and thus equalize the fiscal pressure (33%) with the community average (40%). Although on this occasion, they do not explicitly refer to housing taxation, they have been maintaining the same discourse on a recurring basis. The main argument put forward by the community authorities is to equalize the indirect taxation of housing to the European average.
Of the twenty-seven, Spain occupies sixth place among the countries with the lowest taxation, sharing the position with Italy and Slovenia. Below are Poland with 8% applicable VAT and Portugal with 6%. Above our country, the most common VAT rate is between 20% and 25%.
Despite the insistent recommendations to increase the applicable tax rate, the Spanish Government has always publicly stated that this VAT review is not planned in the medium term. Even in the Lagares report, it is recommended to restrict the application of reduced VAT, with exceptions , which include the acquisition of housing .
Meanwhile, the entire real estate sector trusts in these demonstrations, the threat posed by a new increase in the tax applicable to homes would represent a new obstacle to the incipient and, still weak, recovery of the sector. This without forgetting the strong negative impact it would have on employment and tax collection derived from the purchase of a home.
It seems beyond a doubt that this year 2014 is marking a turning point with respect to the most acute moments of the crisis, forming part of the usual conversations among those of us who work in this sector. Factors such as the Vietnam Email List increase in transactions , the stabilization in the evolution of housing prices , the number of new homes started or the evident reactivation of land purchase and sale operations, are clear indicators of a change in trend .
Already at the beginning of this year, studies [1] suggested that we are close to closing the existing gap in the valuation of housing prices (supply vs. demand), which will lead to the inflection point. Factors such as the absorption of excess supply (including SAREB's important portfolio) and the evolution of demand (improvement in the flow of bank credit and the level of employment) will be key in the early confirmation of the signs of stabilization, at the once the sustainability of the process is ensured.
Given this panorama, the European Commission for economic affairs recently surprised. In its latest report, the Community Executive recommends that Spain, among other measures, restrict the application of reduced VAT and exemption cases. Remember that at the level of fiscal policy, our country still has room to improve the budget deficit and thus equalize the fiscal pressure (33%) with the community average (40%). Although on this occasion, they do not explicitly refer to housing taxation, they have been maintaining the same discourse on a recurring basis. The main argument put forward by the community authorities is to equalize the indirect taxation of housing to the European average.
Of the twenty-seven, Spain occupies sixth place among the countries with the lowest taxation, sharing the position with Italy and Slovenia. Below are Poland with 8% applicable VAT and Portugal with 6%. Above our country, the most common VAT rate is between 20% and 25%.
Despite the insistent recommendations to increase the applicable tax rate, the Spanish Government has always publicly stated that this VAT review is not planned in the medium term. Even in the Lagares report, it is recommended to restrict the application of reduced VAT, with exceptions , which include the acquisition of housing .
Meanwhile, the entire real estate sector trusts in these demonstrations, the threat posed by a new increase in the tax applicable to homes would represent a new obstacle to the incipient and, still weak, recovery of the sector. This without forgetting the strong negative impact it would have on employment and tax collection derived from the purchase of a home.