(Google translation from Noticias Vlex.com)
The Congress of Deputies validated by a majority a number of fiscal stimulus initiatives aimed at the home rehabilitation sector that were included in the Royal Decree on Measures to Promote Economic Recovery and Employment, approved on Friday April 9 by the Council of Ministers.
The government expects that the tax package has a strong leverage effect on the construction sector, which together with other government initiatives, such as the reform agenda in public buildings to improve energy efficiency, “serve to contribute to employment generation.
These tax measures will help further the goal of efficiency and energy savings made by the Government in the framework of the Strategy of Sustainable Economy.
DEDUCTION FOR NEW CONSTRUCTION IN THE PIT
The first of these reforms is the new temporary income tax deduction for improvement works in the residence. This will be deducted up to 10% of the amounts to be invested between April 14, 2010 (date of entry into force of Decree-Law) and December 31, 2012 on actions to improve the residence, or building in which it is found, with a total limit of 12,000 euros per household. The annual limit per taxpayer is € 4,000.
To be eligible for this deduction the vast majority of taxpayers, with the exception of those with a higher tax base to 53007.20 euros, representing only 5% of the total. The deduction is most effective on taxpayers with taxable income exceeding 33007.20 per year, as they may apply the 10% deduction on the basis of the prescribed annual maximum of € 4,000 per taxpayer. As the income level of taxpayers go on increasing this limit, the basis of the deduction will be reduced to zero when it exceeds the taxable EUR 53007.20.
To optimize the effectiveness of tax incentives, will be allowed to the amounts paid by a taxpayer during a period that cannot be deduced by the application of the base annual maximum of 4,000 euros established, can be derived, with the same annual limit during the four subs.
In any case, the amount subject to deduction for all applicable tax periods that apply not exceed 12,000 euros per residence. In cases where there is more homeowners eligible for the deduction on a same property, the limit of 12,000 euros will be distributed among the joint owners according to their respective percentage ownership in the building.
In line with the provisions of the State Housing Plan and Rehabilitation 2009-2012, allowed to benefit from this new tax incentive works aimed at improving the energy efficiency of the home (installing solar panels, improved insulation of windows, change …), shower bath by consolidating security and sealing of buildings (replacement of facilities of electricity, water or gas), to improve the accessibility (lifts adapted to the needs of people with disabilities, installing ramps. ..) and install new telecommunications infrastructure to provide access to the Internet or digital television services in the homes of taxpayers.
On the contrary, works carried out in parking lots, gardens, swimming pools, sports facilities and other similar items shall not be entitled to deduct, nor will change of furniture of the kitchen cabinets do or wear, replace tiles, paint , throwing bricks or change soils.
It is important to note also that the incentive can be applied only on the amounts paid by credit or debit card, bank transfer, check or income accounts of credit institutions, not when the services are paid in cash. This caution has as main objective to collaborate in the prevention of tax evasion and labor.
Taxpayers may not get the benefits of this new tax relief from the Income tax Statement, 2010 (to be made in 2011) and therefore they cannot apply that in this exercise. It is therefore important to retain the invoices received by the work involved to justify the investment.
In this regard, it will be retained as proof of payment method chosen as the invoice, which shall contain the following information: number and number of the same, the date of issue and date of completion of the operation if two do not coincide, name and first name of the consignor and consignee, NIF and address of the consignor and, where appropriate, the consignee detailed description of the action taken, type or VAT rates and tax charged VAT.
REDUCED VAT RATE FOR REPAIR WORKS
The second major tax incentive is the reduced rate of 7% (8% from July 1) of the VAT for all types of renovation and repair of private housing to be made between 14 April 2010 31 December 2012. So far, the scheme only applied to the masonry, and the rest were applied to 16%. With this new framework, it will also benefit from the actions of plumbing, carpentry, installations and fittings, electricity or painting and, in general, all the reforms made in housing, whatever their purpose.
The Royal Decree establishes three requirements to qualify for the new tax scheme. First, the recipient is an individual and that the works are directed towards a particular purpose, and not a business or professional. This requirement will also operate when the recipient is a community of owners and the works are made in the building where is the private dwelling. Second, the construction or rehabilitation of housing where the works are finished at least two years before the start of the renovation or repair.
The third requirement is that the incentive applies to those who do not provide material works costing more than 33% of the taxable amount of the transaction. For example, if the work in question was the placement of the floor of a house and the same total cost amounted to $ 10,000, you may apply the reduced rate if the material used does not exceed 3,300 euros. If the materials provided exceed that amount, the rate applicable to such work is the normal 16%. Until the present Decree Law, the limit of the material was 20%.
The invoice must state the cost of materials supplied or the condition that this cost does not exceed 33% of the tax base.
EXTENSION OF THE CONCEPT OF REHABILITATION IN THE VAT
The other axis of action to promote the activity in the area of housing rehabilitation is extending the concept of structural rehabilitation for VAT purposes, through the definition of similar works and related to structural, which will reduce tax costs economic activity associated with rehabilitation.
The old law already took these concepts, but did not give them an adequate definition, which prevented, in many cases, the application of reduced rates in certain actions related to rehabilitation. The definition of these concepts in the decree law that goes into effect now will not only improve legal certainty for businesses, but will significantly reduce your tax costs.
So, since last April 14 and remain in force indefinitely extending the concept of structural rehabilitation, which applies the reduced rate of 7% (8% from July 1) to the works of rehabilitation of buildings, including premises attached garages, additional facilities, provided that more than 50% of the building is intended for private homes.
To be considered for rehabilitation, the cost of works should not exceed 25% of the purchase price of the building (if it was made in the two years prior to rehabilitation) or market value, less in both cases land value. Also, over 50% of the actions envisaged in the project will include reconstruction of the building or in carrying out similar works or related to those.
Consideration will be given to works like structural adjustment actions that serve to ensure stability and mechanical strength of the building, the reinforcement of the foundations, the expansion of built-up area, the reconstruction of facades and patios of interior and installation of elevators. Related works will be considered, for their part, masonry, plumbing and carpentry, measures to improve facilities and enclosures or energy rehabilitation works.
The decree provides, finally, the reform of the Canary Islands General Indirect Tax in the same sense that the VAT on materials which are appropriate to state regulation, so that the tax benefits resulting from these changes reach the entire territory.
Part-time employment in Spain rose 1.2 points in September 2009 
compared to the same period the year before, while in the EU, the increase stood at 8.0. The greatest increase took place in Ireland with a raise of 3.3 points upward which made this Country reach 21.2% of the employed population. Spain, according to the report stands as the sixth European country having less use of such contracts, followed by Portugal (10%), Poland (8.1%), Hungary (5.9%), Greece (5.8%) and Czech Republic (5.4%). The opposite of Spain placed Italy (14.1 per cent) and France (17%). Holland, with a 48.1% of the total number of part-time employees leads the generalization of this type of occupation with wide gap, followed by Sweden (26.2%), Germany (26.1%) and UK (25.9 per cent).
Yes, you are, since the law says the expenses will be deemed as general even if they are not imputable to one or various properties within the community, nor shall the non-usage of a facility bring exemption from the fulfilment of the maintenance obligations. However, you may want to have a look at the community’s bylaws and/or approved rules or decisions of the Owners General Meetings in the past, as these could have validly changed such general rule.
Yes, you can, but only if you have the approval of the Owners General Meeting.
Angry expats in Spain hope to pit the country’s political parties against each other in an attempt to save their homes from demolition.
Protest group AUAN wants to put pressure on politicians in Andalucia by recruiting thousands of supporters in a voter registration drive. It aims to stop the junta regional government knocking down illegally-built houses owned by foreign residents.
“There are elections in May 2011 and we want to turn this into a do-or-die issue for the government by registering people to vote,” AUAN’s president, Maura Hillen, told OPP.
“There is some recognition by the opposition parties of the damage this is doing to the construction industry but the government shows no evidence of budging an inch. One of our objectives is to politicise the issue and to make it a problem for political parties in local towns so that it filters back up to the junta.”
More demolitions
Spain’s image as an overseas property destination has been hit repeatedly in the last few years by government attempts to counter widespread illegal building along the coast.
Five foreign residents living in Albox were handed demolition orders last week. Eight more from the town await a court hearing – despite hundreds of Malaga expats demonstrating in support for them last month.
Hillen said many more people could be persuaded to join the cause and AUAN is teaming up with similar groups such as SOHA in Axarquia to build support.
“It’s going to get worse before it gets better,” she said. “There are currently 300 households in our group but we estimate this affects around 5,000 in the area, so there could be a lot more publicity.
“The biggest problem we have within the expat community is apathy. Few people have yet woken up to the fact that this is a problem for them but the truth will out in time.”
The problem isn’t likely to disappear soon, she added. “The junta wants to solve this on a case-by-case basis and God knows how long it will take through the courts. It’s taken seven years to decide they are illegal and it could be several more before a decision is made on the demolitions.”
By Stephen Harris of www.opp.org.uk
If it is seriously detrimental for your interests and you can also bring together 25 % of the owners and shares, the Law allows you to claim at the court in order that the decision is annulled even if it was validly voted by the majority. Ask us to tell you how.
Spanish bank agent Bancaja Habitat is attracting foreign buyers to its repossessed property stock with 85% loan-to-value mortgages.
Bancaja has sold around 40 units in the last three weeks to foreign and domestic buyers, who don’t have to start repaying the mortgage for three years.
The reluctance of Spanish banks to lend to foreigners at high loan-to-value rates is seen as a major obstacle to clearing the backlog of unsold and repossessed property in tourist areas. The number of new housing loans issued in Spain last year fell by 22%.
Since the start of the year, several banks have begun offering better mortgage deals and as much as 100% loan-to-value but often tied to specific developments.
“We’re still at a stage of the crisis where more stock is coming onto our books and the numbers are going up,” said Miguel Martínez-Mariño, country manager for Bancaja Habitat in the UK. “We have to take the initiative and ask what we can do to sell.”
So far most sales have been made in Spain, where the company has launched a nationwide advertising campaign across TV, radio and newspapers. But the agent is now hoping to attract to more British buyers and is also offering the deal through its Scandinavian offices.
Martínez said the mortgage offer had a positive reaction at last week’s A Place in the Sun exhibition in London. “We had around 70 enquiries and the majority of people were looking for finance. Their initial reaction to our deal was to ask ‘where’s the catch?’ They couldn’t believe it.”
Source: OPP
The transfer tax, or Impuesto de Transmisiones Patrimoniales (ITP), applicable to private real estate property sales, is for the time being in Andalucía a 7% of the value declared in the contract for private sales. However, as from March 19th, 2010 the tax has been raised to 8% for the stretch of the value of the real estate property that exceeds the amount of 400,000 Euros. The same new rate will apply to garages (except for those annexed to houses with a maximum of two units) for the stretch of the value of the real estate property that exceeds the amount of 30,000 Euros.