Americans wondering what action might breathe some life into their mortgage interest deductible residential real estate market, a brief look at the first bright idea the current Spanish government has had since... well, forever.Currently, Spanish tax law permits the deduction from income of 15% of the cost of buying a primary residence to a maximum of about 9,000 euros a year. During today's policy presentation, president Zapatero announced that, in 2011, this privilege will no longer be available to citizens earning more than 24,000 euros annually.
Couple introduced and guaranteed de facto inflation in two years' time with the very agressive marketing of foreclosed homes on the part of the banks and cajas, the lowdown, visceral loathing the average Spaniard feels at the prospect of having to pay taxes and an expected loosening of mortgage credit in the wake of M. Trichet's recent announcement, them that's got will start shelling out the shekels in short order.
Not that we think it will be sufficient to clear all of the housing inventory, but if the recent flurry of literary activity in what was a moribund Spanish real estate blogosphere indicates anything, the timing of this might turn out to be perfect.
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3 Comments:
do you mean to imply that the "deadline" for that tax deduction will "inspire" home purchases in the near future?
if so, well, that's a long shot. isn't it?
2 years of a deduction that is then lost? say you have a $2000/m mortgage payment. after 2 years that tax deductions comes to $7200. Is $7200 a big motivator when it comes to purchasing a home? Enough homes to clear the inventory?
I must be missing something. (No surprise there.)
Just wondering...
mind you, that $7200 is not money you get to keep in your pocket... it's make-believe money from the future!
Does the deduction get grandfathered in? I am missing something as well.
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