Spanish tax authorities admit that the VAT rate of 4% is not only for first residences
Spain´s prime minister Mariano Rajoy announced to maintain the reduced VAT for new construction of 4%, but only for the purchase of new built houses in Spain used as principle residences. However, the Royal Decree for Urgent Measures opens the range to any kind of new built houses that are sold from 1st January to 31st December 2012: whether it is first, principle, holiday or luxrious residence, or to be rented out, bought as investment, etc. All of them benefit from the reduced VAT rate of 4%, applied on products of basic necessities.
Sources of the Department of Housing explained to the Spanish newspaper El Mundo that despite of the new Government´s plan to prolonge the reduction of the VAT from 8% to 4% only on the purchase of principle residences, “this will not be viable as the VAT is a tax which doesn´t make any difference between each house type”, in accordance to what the Spanish Tax Authorities state.