Spanish Government to Increase Tax Relief on House Reforms25/05/2012
In a bold move, the Government Executive announced that tax relief for restorations is to be doubled, from 10% to 20% of the cost of the work.Further relief is to be extended to second homes, whether rented or not, in a bid to encourage this activity, create jobs and lift the flagging construction sector in Spain.
Spain’s Finance Minister, Elena Salgado, has estimated that this effort could create up to 350,000 jobs. Applications for permits for the renovation or restoration of residential Spanish homes reached 32,613 last year, representing an increase of 2% over 2009, according to data collected by the Ministry of Development.
New Tax Incentives
The rebates increase from a maximum of 10% to 20% and include second homes, even if the landlord has to rent, provided it is not intended for commercial or economic activity.
Taxpayers with incomes of up to 53,007.20 Euros may benefit from the maximum deduction (before, the full deduction was on a threshold of 33,007 euro’s). Those with higher incomes, up to 71,007.20 (the new ceiling), will be entitled to progressively reduced rebates. This excludes only 2.7% of taxpayers.
The top annual deduction base is to be expanded from 4,000 euro’s to 6,750 euro’s, with the maximum relief for the taxpayer to reach 1,350 euro’s (20% of 6,750 euro’s). The deadline remains at 12 December 2012.
These measures are expected to be announced in the Cabinet on 29 April, explained Alfredo Perez Rubalcaba, Vice President of the Government Executive, as they are included in a new employment decree to be adopted by the Government.
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