IVA to go up to 18%

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04 Jan 2010 12:00 AM by samcampbell Star rating in Costa Del Sol. 136 posts Send private message

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I overhead some very angry spaniards talking in the post office about the increase in iva from 16 to 18% from June, I have not read about it anywhere, although I have an awful feeling it is and the awful implications it is going to have on a very bruised and battered southern spain.  Any other EOS'ers know more.



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04 Jan 2010 11:13 PM by bobaol Star rating. 2253 posts Send private message

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The standard rate of IVA in Spain is due to rise to 18% from July 2010 and the reduced rate up from 7 to 8% at the same time.  This has been planned for some time.

This site  gives the VAT rates, current and forecast, for all EU countries.

 





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05 Jan 2010 8:28 AM by samcampbell Star rating in Costa Del Sol. 136 posts Send private message

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Boboal, Thank you for the link, very informative.



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05 Jan 2010 11:04 AM by guslopez Star rating in Lorca, Murcia.. 744 posts Send private message

They were talking about putting it up to 19%, same as Germany.



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05 Jan 2010 12:29 PM by EOS Team Star rating in In Spain of course!. 4015 posts Send private message

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I didn't know about this

Surely this is the last thing that is needed at the moment?

Oh dear...

Justin



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05 Jan 2010 1:42 PM by Sanchez1 Star rating. 853 posts Send private message

I find this incredible to be honest.  Spain really is run by a bunch of clueless muppets.  People are barely spending money as it is!

Does that mean that VAT on property will go up from 7% to 8%?  Not really going to help the property market if that is the case.

 

 



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05 Jan 2010 3:45 PM by TechNoApe Star rating in Duquesa, Manilva. 1277 posts Send private message

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I suppose that with un-employment running at 40% for 18-25 y/o, and nearly 19% as a National figure, rising health care costs, couple all that with so many properties owned by foreign nationals which benefit from municipal services but do not generate money for the municipality in which they reside, and then throw in the lack of revenue from less people on holiday.

Result, you've gotta get some more dosh from somewhere?

Seems a sensible, long term move to me.

Think about it!

Tax those who have got more money than the rest of us, based on what they spend!

Can't raise tax on what people earn, as that would hurt the Employers, as they pay tax and social security, not the employee.

Also, as property prices are now as low as they are going to go, so as properties start to sell (which they are), then the Government can earn more income, thus be able to use other fiscal policies to, in the long term, stimulate the economy.

At least the Spanish economy has stabilised... right at the bottom perhaps...

But things can only get better from here!



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07 Jan 2010 1:33 PM by Sanchez1 Star rating. 853 posts Send private message

Hi Colin,

Can't raise tax on what people earn, as that would hurt the Employers, as they pay tax and social security, not the employee.

Employees DO pay tax and social security in Spain.  Employees pay around 5% in NI but the employer does get stung for something like 25% though. 

Also, as property prices are now as low as they are going to go

At least the Spanish economy has stabilised... right at the bottom perhaps...

Not sure how you can say these things.  The economy is continuing to get worse and unemployment is still rising and likely to continue rising well in to 2010.  This will not be good for property prices surely?

I think property has gone from being ridiculously expensive to just being expensive now.  Most property prices are still well out of reach of the average Spanish family.  It's going to take a long time and a lot more price reductions to get rid of the 1.6 million unsold properties in Spain.  I'm personally in no hurry to buy here as I think the real bargains are still years away.

Getting back to the VAT increase, it's not really an encouragement for people to go out and spend money is it?!

 



This message was last edited by Sanchez1 on 07/01/2010.

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07 Jan 2010 2:11 PM by goodstich44 Star rating in northampton. 1648 posts Send private message

Sanchez

I think you are right?. I think there could still be a big drop in prices. Probably the main reason there isn't far more property for sale is negative equity right down the line. What with that, the rising cost of living/recession and the well reported dodgy mess that is the Spanish property industry, how many will buy in the near future and at what price with 1-2 million unsold properties that sooner or later will need some recovery of monies? There will always be a small steady flow of lifestyle buyers of course, but huge bank debts, developer debts etc on unsold/unfinished property must be rising at an alarming rate, and I don't think that issue has even been faced head on yet or really exposed? 

Who knows for sure though, TechNo might be right?, or perhaps the Spanish government will come up with a cunning plan that would suprise even Baldrick himself??............or perhaps not!!





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07 Jan 2010 2:29 PM by Tish Star rating in Surrey. 833 posts Send private message

I wouldn't mind betting that VAT will increase in the UK too...probably to be anounced in the budget in April.  I think it could go to 20%.





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07 Jan 2010 2:53 PM by goodstich44 Star rating in northampton. 1648 posts Send private message

Tish

I don't think that will happen in the UK as it would be so devastating for business, but having said that the huge debt must be sorted and paid for by a tax of some sort?  Until the election's over we just face bulls*it and waffle from all sides anyway!





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07 Jan 2010 3:38 PM by Tish Star rating in Surrey. 833 posts Send private message

Hi Goodstich (Happy New Year! )

Whichever party wins...taxes will have to increase. Any increase of any kind of tax is gonna hurt....usually those who can least afford it. 



This message was last edited by Tish on 07/01/2010.



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07 Jan 2010 3:42 PM by TechNoApe Star rating in Duquesa, Manilva. 1277 posts Send private message

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There are two camps of thought, one says things may get worse, whilst others, including myself, say things can only get better.

However, even though there is a glut of unsold properties across Spain, in some areas there is less and in some there is more.

And those that were forced to sell because of high interest rates, well they have all done so or managed to hold on, and now interest rates are rock bottom and will not go lower, and will stay low for some considerable time.

There are some developers out there desperate to sell whilst there are others, including ours, who is not and is refusing to lower prices than those from when we purchased. There will be, and are, bargains to be had, but only from 'Bank' stock or developers desperate to sell, and such bargains are already selling like hot cakes to shrewd investors, who are looking at the long term investment.

As for re-sale, any further drop in prices will be those who for reasons other than fiscal borrowing, are desperate to sell. Indeed some re-sales I've seen advertise have gone up slightly. Why? Because of what I've already said.

More and more re-sales now are not forced, so they are re-thinking their prices. We did the same in the UK, we sold our house when prices started going back up, and put our asking price up, and when we did, we had more interest than ever before and sold within 8 weeks of doing so.

In the UK, VAT has now risen back to 17.5% and I also suspect will go up in the next budget - they either have to make drastic cuts to public spending or raise revenue by some other measure, and they can't 'directly' tax people any more than they do already, so 'in-direct' methods of tax (VAT) will probably go up.

As for people not spending in Spain,  not from what I've seen. Every time I go to the shops they are jam packed, and most business I speak to say they are managing, even though we are in recession, and speak of light at the end of the tunnel.

Some EU economists say that the Spanish economy is about rock bottom... mind you others say that it 'may' worsen slightly during first two quarters 2010.

So, based on my own experiences here in Spain, and looking at the long term picture, I feel things will 'slowly' start to get better during 2010, especially as there is already greater interest from the Brits to have a 'Holiday in the Sun' this year due to the awful weather they had in the UK 'staycation' during 2009, and if you couple that with the freezing winter the UK has had, and is still experiencing. Indeed, my parents are staying with us as we speak, and having been here now for 4 weeks, can see why we moved and indeed are seriously considering doing so themselves... and they are pensioners!!!

And going back to the Spanish VAT increase, Spain has by no means the highest VAT in the EU, even when you take the proposed increase into account.

There is sometimes 'method to madness'.



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07 Jan 2010 3:56 PM by TechNoApe Star rating in Duquesa, Manilva. 1277 posts Send private message

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And having just made that reply post below, I then saw and read this article.

"Barbara Wood of The Property Finders, reporting that transactions in prime areas around Marbella were increasing as early as the first quarter of 2009. ‘Secondary areas lagged behind with the first green shoots only appearing about nine months later and the worst locations are still in total paralysis in 2010,’ she said.

Currently the typical person looking for property is a cash buyer, buying for their own use, with a medium to long-term perspective, not dependant on rental income and only interested in buying in prime locations, she explained.

‘And those that require a mortgage need a maximum of 50% relative to value. In other words, the right purchasing parameters are in place again. Spain’s property market managed very well without a mass market before the boom of the Noughties and will do so again, returning I hope to the stability and long-term growth that held for four decades but this time going for quality rather than quantity,’ she added."

and

"When I’m asked about price falls, if they have hit bottom or if they have further to go my reply is that it all depends and there is no one answer but it seems to me that there are two main factors influencing outcomes: location and how badly the seller wants to sell."

Seems to say everything I've been saying!



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07 Jan 2010 4:58 PM by goodstich44 Star rating in northampton. 1648 posts Send private message

Tish

happy new year to you also

yes I think some unpopular measures need to be taken if we are ever to pay back serious amounts. Who will be brave enough to do it though?  And yes, tax those who can afford it. The rich/poor divide seems to getting bigger in the UK not smaller despite a socialist government, and the Tory's certainly won't improve that if history is anything to go by!!. Vat going up would hit everyone the same, but the poorest would feel it the most.

TechNoApe

positive thinking indeed, but not sure it takes in to account the well reported reasons that 's caused Spain's costas to be in their current sorry state, and why many wont touch it with a bargepole at the moment?.





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07 Jan 2010 7:20 PM by Tish Star rating in Surrey. 833 posts Send private message

WHOA!!!  Congrats on becoming a "VILLA" Goodstich!!





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07 Jan 2010 8:56 PM by goodstich44 Star rating in northampton. 1648 posts Send private message

Tish

well thanks for that.......and it's all legal!!





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07 Jan 2010 10:38 PM by Pitby Star rating in Andalucía. 1904 posts Send private message

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Ahh, but maybe it's not Goodstich!  Maybe, it's an unscrupulous system - certain functions have been corrupted to accept cyber bribes and you've been 'elevated' to "Villa" status without the proper licences!!

Sorry, couldn't resist it!! 





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07 Jan 2010 11:01 PM by EOS Team Star rating in In Spain of course!. 4015 posts Send private message

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"Those that say that Goodstitch paid us for his villa status are complete liers.  I bought that Rolex with my own money, working for EOS town hall."



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08 Jan 2010 9:51 AM by goodstich44 Star rating in northampton. 1648 posts Send private message

EOS

oh no!, it's out in the open then!. Well I thought if I can't beat em'............ I like to think of my virtual villa as a virtual lifestyle decision, then when it loses half its virtual value in the next few years, I can proudly say '' well I didn't buy it,'' ......whoops, I meant  ''get given it '' to make a virtual profit!   

 





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