The Spanish government has announced new measures to inject life into the country's battered property sector and to boost its public finances.
The Spanish cabinet agreed to cut VAT on new home purchases from 8% to 4%, bring forward corporate tax payments and cut health spending on brand-name drugs.
A government spokesman said the reduction in tax on home buys, aimed at stimulating the construction sector, would last only until the end of this year.
The measures are aimed at fending off debt market attacks while avoiding drastic cuts which may damage the ruling Socialists' chances in November's general election.
The opposition People's Party, likely to take power in general elections in November, has called the changing of corporation tax payments an accounting trick.
Analysts say hitting this year's deficit target of 6% of GDP will be hard for Spain given growth that barely hovers above zero, high debt-servicing costs and broader global growth concerns.
Spain's borrowing costs have come down since hitting euro-era highs in July thanks largely to bond-buying by the European Central Bank.
Prime Minister Jose Luis Rodriguez Zapatero has brought forward general elections by several months to November 20.
