The new real estate tax system in Catalonia: a "punishment" for investment

Following the line of the central government, the Generalitat has modified the tax rate of the Property Transfer Tax (ITP) for home purchases. This change, which had been announced for some time, increases the tax rates, making Catalonia the most expensive place in Spain to buy a home.

Previously, the ITP had two brackets:

• 10 % for homes costing up to one million euros.

• 11 % for prices above that.

With the new reform, four additional brackets have been added, which penalize buyers with greater purchasing power:

• 10 % up to €600,000.

• 11 % between €600,000 and €900,000.

• 12 % between €900,000 and €1,500,000.

• 13 % for prices above that.

This increase is particularly notable when compared to other autonomous communities such as Madrid, the Basque Country, or Andalusia, where the ITP ranges from 6 % to 7 %. It is even more paradoxical that no reductions have been proposed for lower-cost homes, for example, in brackets from €0 to €300,000, which could facilitate access to a first home for young people and families.

The message to large investors

The ITP at 20 % for the purchase of entire properties and for large landowners is the most concerning aspect. Additionally, the abolition of the 70 % discount that real estate companies had for properties they bought, renovated, and sold within three years adds to this.

These measures send a clear message to investors: "We do not want your money in Catalonia; go invest it elsewhere." This is a serious mistake, stemming from a dogmatic vision on the part of those responsible for these laws. Under the premise that those with money are "bad" and should be punished, investment is being driven away at a critical moment.

The logic, in a housing crisis situation like the current one, would dictate the opposite. After more than a decade without an effective housing policy and with a deficient housing law, the solution is not to punish but to offer attractive conditions, tax incentives, and legal security to attract investment, including foreign investment, thus promoting the construction of long-term rental homes.

In the coming months, it is likely that we will hear those responsible complain about the lack of rental apartments, blaming capitalism. However, the true culprits of the lack of investment in housing are those who, with their dogmatism, believe that punishing investors will increase the supply of rental homes.