Housing Benefit
The measure can encourage the flats for sale foreclosed by banks that provide financing up to 100%. Builders and large real estate believe that the reduction of VAT can animate real estate here year-end. Last Friday, the Council of Ministers agreed to lower from 8 to 4% the VAT levied the purchase of new housing. The measure, which will be extended until the 31st of December, has been well received by the builders and the large estate, not so much by the smaller companies.
The truth is that one of the most benefited by the measure may be the banks. At this time, the purchase of an apartment is hard work. Regardless of the economic difficulties, who decides to buy stumbles with prices that continue to fall (with what become doubts) and a few banks that give few credits and with tougher conditions. This is compounded by the fact that banks and savings banks are already a fundamental actor in the sector, and not only by his power of Finance. The crisis has left thousands of apartments, real estate assets that weighed in the balances, and those who want to RID in her hands. Therefore, at present, banking grants especially mortgages to sell their own homes.
VAT or ITP VAT reductions can then boost the sale of new and embargoed floors that have financial institutions that do offer financing up to 100%. At his side, real estate classic could be as much funded 80% of the price. In addition, banks and will benefit if they have new construction homes in which VAT is serious and not the ITP (tax on patrimonial transmission). The second-hand housing, which represents more than half of sales, if taxed by the ITP tax that has not been touched. In any case, the reduction of VAT from 8 to 4% has been welcomed by the large estate. Already on Friday, the group that brings together the major real estate, the G-14, applauded the measure of the Government because it can help boost a sector very punished by the crisis. It will activate the market also the President of the Association of real estate developers of Madrid (Asprima), Jose Manuel Galindo, it welcomed the measure. In his opinion, although the temporary nature of the measure prevents that it absorbs all the stock market, it will help in shopping and contribute to that prices are still adjusting. However, Galindo added that are necessary more measures, such as the recovery of the deduction for purchase of principal residence, to dispose of all stock and to begin new promotions, which is what creates jobs.
In Catalonia, the builders have applauded the initiative. The President of the Asociacion promoters and constructors of buildings of Barcelona (APCE), Enric Reyna, believes that this initiative will facilitate the departure of part of the housing stock still pending sale. For his part, President of the Guild of builders of works the Barcelona and Comarcas, Nestor Turro, has also valued positively the measure. However, it believes that the reduction of this tax will not be sufficient if only one to revive the sector and that it should be accompanied by other initiatives to boost significantly the construction and the generation of occupation. Source of the news: the reduction of VAT on housing benefit to banks.
