The Spanish Parliament has rejected a bill put forward by the Catalan separatist party ERC aimed at “combating” alleged “speculation” on the real estate market by introducing a tax on the purchase of housing starting from a third property. The full support of the PSOE and all partners in the left-wing coalition was not enough to outweigh the “against” votes of the PP and Vox, with PNV and Junts abstaining.
ERC’s Initiative and the Objectives of the Tax
The authors of the bill argued that the Spanish real estate market has become a “safe haven” for investors, and that the only way to guarantee the right to housing is not to increase construction volumes, but to step up state intervention. ERC’s tax plan to curb “speculation” was intended to penalise the accumulation of housing in the hands of large owners through an additional levy on homeowners starting from their third property.
Proposed Tax Burden
Under the proposal, when buying a third property, buyers would have to pay, in addition to the standard VAT, an extra 4% of the sale price; for a fourth – 8%, for a fifth – 12%, and then a further 5% for each additional property. The proposal also included lower property purchase taxes for young buyers, the removal of tax benefits for so-called socimis – listed companies that specialise in real estate investment – an increase in VAT to 21% on tourist apartments, and a higher minimum rate of the property tax (IBI) for housing owned by large landlords that is not their main residence.
Opponents’ Position
Opponents of the bill described these measures as “tax populism” that would not solve the problem of access to housing and could instead reduce the attractiveness of investment in rural areas and areas with low demand. They also warned that such unworkable measures would “criminalise” small landlords and remove incentives for companies willing to promote affordable rental housing.
