DavidJackson.info

President Griñán of Andalucía has warned that due to falling tax revenues, the 2011 budget of Andalucía will be “not happy, and extremely restrictive”. He said that certain ministries must expect “sweeping” budget cuts.

He made the comments in a press meeting today after leaving a government meeting which was discussing the 2011 budget.

However, he has promised to maintain the programme of “social inclusion” – ie, enourmous handouts to people who don’t want to / can’t find work: we know the programme is working fine, because Andalucia has one of the highest unemployment rates in the whole of the EU- and has promised a vague programme called “sustainable Andalucia” which is supposed to involve 3,000 million euros worth of investment over the next 5 years.

He has -no doubt remembering that the unions are planning to strike on the 29th of Sept- said that he is not expecting any staff cuts in any government organisation. He also ruled out any regional elections before 2012, “come what may with the national elections”.

What fun. Here’s an interesting fact that escaped my notice (what with the foxes and all).

IVA medium rate goes up tomorrow (1st July 2010) to 8% – meaning if you buy a new house tomorrow, costing 200,000€, it will cost you 2,000€ more in tax than it would have today (7% IVA rising to 8% IVA). IVA is only applied to new homes, right?

But, Andalucia has said that the Impuesto sobre transmisiones patrimoniales, which is the tax that is applied instead of IVA on the sale of second hand homes, will stay at 7% instead of rising to 8% (on all homes costing under 400,000€).

The ITP is a community tax applied by the regions, so for example Extremadura has done the same thing (up to 300,000€), Galicia I believe is sticking at 6% and most other regions are increasing the tax to 8% to be in line with the IVA rise, as the central government has recommended.

So it’s now cheaper to buy a second hand home in Andalucia than the equivalent new one – by at least 1%.

Actos notariales remains the same (in Andalucia). Rule of thumb – look at the house price and add 10% for the taxes (11% if it’s a new home!).

Seems the most expensive region in Spain for tax on second hand homes is now Catalunya – the cheapest, the Canary Islands (6,5% ITP, although no IVA is charged on new homes, so it’s the other way around there).

President-for-life Manuel Chaves is to leave his position as President of Andalucía, and will take up an important position in the central Government, as head of Territorial Organisation, and as one of three new Vice Presidents Zapatero is creating.

After 19 years in the job, he is handing over to Nº2 – José Antonio Griñán.

ZP is expected to announce a major cabinet reshuffle next Tuesday, when he will remove current Finance Minister Solbes and replace him with Elena Salgado. He will also create two new “Vice President” posts, which means he will have three deputies: current VP María Teresa Fernández de la Vega, Chaves & Salgado.

Frankly, I’m stunned. It’s obviously the first step towards him running for President of Spain.