In a rather bizarre move given the overall situation in Spain the regional government of Catalonia has increased transfer tax on the purchase of a second hand property from 8% to 10%.
The last few months have seen some small green shoots of recovery in the property market in Spain with sales starting to increase slowly. Any extra costs could snuff out the tiny improvements and halt the anticipation of further recovery in the property market during 2013.
In complete contrast to last year when tax breaks were given both on new builds and capital gains to help kick start sales the reverse now seems to be true for 2013.
Andalucía who already was like Catalonia out of synch other regions on tax levels will no doubt join Catalonia and look to increase taxes. What benefit they believe they will gain from suppressing sales and what school of business these politicians come from beggar’s belief. No sales mean no tax revenue whatever level of tax you have in place.
Buyers should look to other regions to buy and be aware that taxes in Spain are not national but regionally defined.