A reduction of VAT on new holiday homes as well as main residences looks set to remain in Spain for the rest of 2012, after the country’s new government failed to impose suggested conditions on properties that qualify for the discount.

In 2011 Spain’s previous Socialist government reduced the amount of VAT payable on new homes to 4 per cent from 8 per cent. During the election campaign, the opposing People’s Party (PP) vowed to keep this reduction at least until the end of 2012, but this would apply only to main residences under a certain price.

Now the PP are in government it seems that they have done away with these conditions. In the bulletin published by the new PP government at the end of December 2011, there was no mention of further conditions, which in effect means that VAT (IVA) on all new homes, regardless of value or usage, will be set at the 4% rate until the end of this year. This is encouraging news for all potential house-buyers in Spain.

For details of property for sale in Spain, visit the Spanish listings on Rightmove Overseas. One way to save money when buying in Spain is to use a currency specialist when transferring your pounds into euros to complete the purchase of your property. For more information on this, contact Smart Currency Exchange.

To understand the full step-by-step process to buying a property in Spain, collect The Overseas Guides Company’s ‘Spain Property Buying Guide’