Spain halves sales tax on new homes

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Spain halves sales tax on new homes

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The Spanish government announced new austerity measures to cut its budget deficit on Friday, together with plans to stimulate the weak economy.

Officials said they hoped a temporary cut in the tax on new properties from eight to four per cent would boost the number of homes sold.

Plans also included re-energising the housing market, which was the driving force behind a decade-long economic boom, to help bring down unemployment.

“With this measure, we are contributing to the creation of new jobs in the (construction) industry most affected by the economic crisis,” said Spanish government spokesman Jose Blanco.

Nevertheless, with around 700,000 unsold properties left over from the housing boom, commentators said they thought the need for new construction activity would remain weak for some time.

Elsewhere, ministers said they planned to make five billion euros of savings by forcing regional governments to buy generic medicines. Opponents condemned the decision, fearing that may lead to shortages of vital drugs.

Large companies would also be required to bring forward their tax payments, officials said.

Parliament has been recalled to vote on the measures next week.