Spain to Exclude Polluting Cars from Tax Break
Date: 02-Jan-07
Country: SPAIN
The new version of the so-called Plan Prever will offer a 480.81 euro (US$634) tax break to anybody swapping a car more than 10 years old for a new vehicle with an engine of up to 2,500 cc.
That rules out many four-by-fours, which have enjoyed a huge gain in popularity in Spain in recent years.
"Not applying Prever to those vehicles is justified because they are less environmentally friendly, both in terms of their emissions and the way they are used," the Economy Ministry said in a statement after the government's weekly cabinet meeting.
The old Plan Prever was introduced in 1997 as a measure to boost car sales. Since then, Spain has enjoyed a long economic boom and new registrations have grown, although the number of people qualifying and applying for the tax break had waned.
The plan was due to expire at the end of 2006 and the new version will last one more year, until Jan. 1, 2008.
The Economy Ministry said it would stop offering another tax break introduced in 2001 to encourage individuals to buy cars running on unleaded gas.
Car dealer association Faconauto was quick to criticise the plan to scrap tax breaks on bigger cars.
"(This will) cause big distortions in demand at a time when the car market is showing clear signs of slowing down, an effect that is being softened by the strong growth in sales of luxury and 4x4 cars," it said in a statement.
In the first 11 months of the year, new car sales in Spain fell 1.6 percent while 4x4 sales rose 12.3 percent. Full-year car sales figures are due on Jan. 2.