From last week, El País reports that the PSOE is shaking up the housing market with a battery of tax measures. The Socialist parliamentary group has introduced a bill in Congress to increase the taxes payable on vacant housing, to tax foreign (non-resident) home buyers and to raise the IVA on tourist apartments. The article begins: ‘The PSOE has pulled out all the stops to address the housing crisis in Spain. The Socialist Parliamentary Group submitted a broad bill to the Congress of Deputies this past Thursday to ease congestion in the residential market, with measures aimed at limiting tourist apartments, curbing home purchases by non-resident foreigners, ensuring the sustainability of public housing stock, and incentivizing lower rental prices...’
elDiario.es begins with ‘The Government announces a tax increase on vacant homes. The Socialist parliamentary group has approved a tax package that, according to Minister Rodríguez, increases the taxation of vacant homes "to encourage them to become part of residential rentals"’. The government wants to use tax pressure to bring an extra three million vacant homes onto the market. The plan is to encourage the release of vacant properties by gradually increasing the amount charged to their owners in personal income tax from 1.1% to 3%. Some experts consider this an insufficient amount for the measure to be effective.
The Majorca Daily Bulletin says ‘Spain pushes ahead with 100 percent sales tax on home buys by non-resident Britons and Americans. Real estate agents and lawyers doubt that it will ever be introduced’. Spanish Property Insight also singles out British and American private buyers: ‘Socialist governing party pushes forward with plans to tax foreign non-resident buyers from outside the EU, mainly Brits and Americans’. It begs the question – who should take precedence in the Spanish housing crisis as far as the Spanish authorities are concerned?
Bloomberg says that ‘Prime Minister Pedro Sanchez’s Socialist party presented the plan as part of a broader housing bill submitted to Parliament on Thursday. The bill seeks to promote “measures that enable access to housing, since we are facing one of the largest problems our society is currently confronted with”’.
One thing is clear – the 100% tax proposal is aimed primarily at the mainly foreign investment funds (fondos buitres) who buy city blocks to put them out to rent. Google’s AI gives this answer: ‘There is no precise data on how many homes are owned by vulture funds in Spain, but it is estimated that a significant number, although not yet precisely defined, exist. Fifty-seven percent of homes in Spain are owned by funds and multi-owners. It is estimated that 15% of homes are owned by vulture funds, and 42% are owned by owners with more than three homes’. Google AI on ‘Vulture Funds’: ‘These are investment firms that buy assets at discounted prices when they are in financial distress, with the expectation of turning them around for profit’.
The other string is to tax the tourist apartments controlled by Airbnb and their competitors at a rate of 21% IVA There are currently some 400,000 tourist apartments in Spain. elDiario.es has a useful map of their location.
From The Times we read that ‘Spain has banned some Airbnbs. This is why they’re right to do so. In a bid to solve the country’s housing crisis, 66,000 short-term lets have been taken off the market...’ The writer says: ‘Do any of us wish to be complicit in the eviction of ordinary people to increase the income of certain homeowners? Do we want our presence in Barcelona, Palma, Madrid, Seville or Las Palmas to be welcomed or resented? Rented apartments almost always beat hotels on price: next weekend £350 will get you either a twin-bedded cupboard in a three-star hotel in Madrid’s Puerta del Sol or, a few streets away, an entire former residential apartment that sleeps four and has an outdoor terrace. But, is bagging that bargain the most important consideration here?’
Several major plans by the Government – all designed to help resolve the housing crisis for the Spaniards.