Spain has announced plans to try to tackle the severe problems facing its housing market
The Spanish Government has decided to try to create more demand for new properties by cutting IVA (VAT) from 8 to 4 per cent thus saving a property purchaser a sizeable €8,000 on a €200,000 purchase.
Spain's economy was plunged into recession following the collapse of its once-buoyant property sector.
The government is also hoping that building projects will help create jobs and cut the unemployment rate, which is one of the highest in the eurozone.
A reduction in tax paid on new properties and incredibly low prices are set to boost the Spanish property market, according to real estate professionals.
The 50 per cent reduction in VAT is applicable until 31st December 2011 and has been widely welcomed by the property industry.