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Property in Spain mortgage relief
Original article: Sol property blog "relief> Spanish mortgage
Recently, Prime Minister of Spain, José Luis Rodríguez Zapatero, announced that by 2011 the mortgage relief for those earning over € 24,000 stopped. After reading original article Zapatero Common sense and have had time to make a little research on the subject and Spain does not seem to be alone in this 'gesture', with countries like Ireland that have implemented similar measures recently.
As is typical in most of the Socialists this system will work on a sliding scale and, of course, punish those who earn more. From 2011 if you earn 17,000 or least one year, you are entitled to relief on the mortgage. More than 17.000 €, will be on a sliding scale and once you get to 24,000 €, no relief for you!
But why implement this in 2011 instead of now? Like other nations? Well, the reasoning seems to be that for implementation in 2011 will motivate home buyers might not usual to wait and see if the market falls further, but buy now. If successful the idea is to help clarify the new / no sell the property , estimated at about 1 million properties, located in Spain.
And in the short term, this might even work. My problem with this, however, is that of Spain reach the main engine of growth, classes stockings. The rich are not affected and the working classes will not benefit unless the household earns about € 17,000 or more, not being able to afford to buy property anyway!
So who else wins or loses in this scheme? Well banks are definitely going to benefit as they will be handing out mortgages. Developers in the short term will also benefit as they will be able to change a large part of their sold / new action. Although the growing number of properties that developers have been turning to banks to clear their debts until recently, banks will also be earning through the sale of properties. And in the long term possibly, developers can get out of all those who are buying their primary residences. But let's be honest, the developers will lose in the future regardless that its current business model for the residential market (building mass) is dead and buried.
In defense of governments, however, that they say This is a "progressive" politics and a way it is. Through a series of studies has been shown to improve landlord performance of a child school. Home ownership also makes it an actor "in the community. The idea is that you as owner of the property will have a more active interest in their environment. But like most studies, the methodology and results are open to interpretation.
In any case, many here in Spain seems to Zapatero has chosen political expediency over long-term economic performance. Either way the main opposition party (Partido Popular) have confirmed that will reverse the plan if elected.
Regards
Andrew Belles
About the Author
Andrew Belles is a real estate agent, working for Arriba Estates in Fuengirola on the Costa del Sol, Spain.
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