VAT reduction on new houses on the way?

Joan Collins THE Balearic Minister for Public Works, Housing and Transport, Mabel Cabrer, yesterday asked for the backing of the Balearic and Spanish Socialists to appeal to the national Government for a reduction in the VAT on new flats and houses from seven to three percent, with the aim of making them cheaper to buy. The Minister said that the reduction in VAT would help young people buy their own homes. The Balearic Government have also helped homebuyers by reducing other taxation, from seven to three percent, on second hand properties. She also said that the Madrid Government should live up to its electoral promises to provide 180'000 new homes. She added that, until March of this year, the Balearics was the third autonomous region to comply with the objectives of the National Housing Plan, with 4'000 new houses, and that in seven months 4'300 applications for the Young People's Mortgage had been made, of which 1'800 had been granted with the backing of the Balearic Government. The socialist Balearic MP, Maria Jose Camps, after describing the Balearic Government's Housing Policy as “practically useless”, questioned the Young People's Mortgage as “the star product of the Balearic Government” in this field claiming that it was a financial service “more pertinent to banks and savings banks”. Camps added that the recipients of this offer, given the conditions demanded by the Balearic Government for its backing, are “the ideal objective desired” by the financial establishments. The socialist MP also criticised Cabrer for “giving up the chance to include measures for the promotion of the renting of houses” in the State Plan 2005-2008, which it signed.