Spain plans 10% VAT on holiday flats in housing bills

More than €1.6 billion in public costs: that is the price Spain’s government puts on two housing decrees facing a vote in Congress on Friday. The plans would bring in a 10% value added tax (VAT) on holiday flats and offer a tax break to nearly a million renters, according to government cost estimates reported by Europa Press on 1 October.

Holiday flats face 10% VAT

The government expects the holiday-flat tax to raise about €170 million a year. If Congress approves the decree, it would begin in December, with an estimated €14 million coming in that month.

The same decree would extend a reduced income-tax rate for vacant homes. The government says this would affect about 2.36 million tax returns and reduce revenue by roughly €154 million.

Renters could claim tax relief

About 945,000 people could qualify for a 10% income-tax deduction on rent for their main home. To qualify, their taxable income must be below €33,007.20. The government puts the cost of that measure alone at €835 million.

A separate decree would automatically renew rental contracts and require landlords to pay tenants 12 months’ rent in compensation if they end a contract. The government assigns it no public spending, though it cannot put a figure on possible costs for public bodies that act as landlords. Both decrees still need Friday’s vote.

Topics: Housing · Social affairs · Tourism · Politics · Economy

Source: Europa Press / Mallorca.com