Holiday Lettings news - Financial incentives aim to boost foreign investment in Spain

Financial incentives aim to boost foreign investment in Spain

In contrast to the spate of bad press for the Spanish property market in recent months, Spain's newly elected government is offering property investors a range of incentives in a bid to inject life back into the country's troubled economy. Surinenglish.com focuses on the various measures being taken.

After being re-elected following the Spanish general election on March 9th of this year, Prime Minister Jose Luis Zapatero of the PSOE party has announced an 11-part plan to get the ball rolling once more. The change that is bound to bring a large smile to the face of expats is the abolition of Wealth Tax, which will be paid for the last time with respect to 2007. The tax, which many experts regarded as obsolete, was considered one of the major stumbling blocks for those considering Spain as a place of residence, as non-residents with property in the country were presented with an annual bill for Wealth Tax, based on their net worldwide wealth. A general allowance was made for some of the income, but this was not applied to non-residents, making Wealth Tax a serious consideration when choosing a country to which to relocate .

However, Wealth Tax is not the only issue being addressed; Kyero.com expands on the other changes that will soon be in force. These include tax breaks for anyone renovating a property at a cost of more than a quarter of the original purchase price. Zapatero's government has also promised to speed up the manner in which public works are put out to tender and contracts signed and sealed, which it hopes will be a step in the right direction to get to the flagging construction industry back on track.

There was also more good news for property investors planning on relocating permanently and not just buying a holiday home - economy minister Pedro Solbes proposed €400 rebate which would be applied to workers' personal income tax. In total, 16.4 million workers, including expats, will be eligible for the financial bonus, with the amount they receive dependent upon their overall salary.

The 11-part plan included further measures which should help to lure foreign investors back onto the peninsular and to rekindle interest from Spanish nationals. As an example, the government is to introduce the option of extending mortgages on primary residences for an extra two years, at no cost to the borrower. Finally, for investors looking to reduce their carbon-footprint, 150,000 state-subsidised houses, constructed with energy-efficiency in mind, will be up for grabs each year.

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