Following the announcement by the President of the Government, Pedro Sánchez, of the 12 new measures regarding housing, the Technicians of the Ministry of Finance (Gestha) have stressed that The tax proposals cannot be considered a complete solution to address the problems related to housing in Spain. In their analysis, they highlight that these initiatives must be accompanied by structural measures that address the causes of the shortage of rental housing and high rental prices.
In the words of Gestha, “experience shows that the effects of tax deductions and incentives should not be overvalued to promote any public action or policy.” Technicians insist that It is essential to analyze the underlying reasons for the lack of available housing and high rents in the market.
Positively valued measures
Among the initiatives announced, Gestha positively values the immediate rental of the 13,000 SAREB homesas well as the construction of social housing for affordable rental. Besides, Measures such as:
- Guarantee that all housing built by the State retains its public ownership indefinitely.
- Open aid lines for the rehabilitation of housing intended for affordable rental for a minimum period of five years.
- Offer public guarantees to owners for the collection of affordable rental rents that are rented to those under 35 years of age.
- Increase inspections of illegal tourist homes and substandard housing.
However, technicians point out that they “miss” preventing the automatic disqualification of officially protected housing (VPO) after a certain number of years has passed.
Fiscal measures are complementary to the problem, but they do not solve it
In the fiscal area, Gestha considers that the approved measures should be understood as complementary. Among them, the increase to 100% of the reduction for renting a habitual residence in personal income tax for owners who rent according to the Reference Price Index, without the need for the homes to be in stressed areas, stands out. This initiative is in addition to existing reductions of 90%, 70%, 60% or 50%, depending on the circumstances.
In addition, Deductions for energy efficiency improvement works in homes are valued. However, technicians consider more effective measures such as the obligation for tourist homes to pay VAT in stressed areas or with tourist saturation, as well as conditioning the 0% rate of SOCIMIS (Listed Real Estate Investment Companies) to the promotion of affordable rental housing. They regret that these two proposals were not finally included in Law 7/2024, of December 20.
On the other hand, Gestha is skeptical about the impact that an increase of up to 100% in the taxes that non-Europeans and non-residents must pay could have when buying a home in Spain.
What happens with the proposals of the Popular Party (PP)?
The technicians of the Ministry of Finance have also analyzed the measures announced by the Popular Party (PP), observing coincidences with the Government’s proposals, especially regarding the guarantee for owners of the collection of rental income. The PP proposes implementing regional insurance to cover possible non-payments.
However, they point out that The recovery of the deduction for acquiring a habitual residence should be evaluated with caution.. This measure was eliminated for new purchases from 2013 due to pressure from the EU, the IMF and the OECD, which considered that the benefit was transferred from buyers to sellers by increasing prices. “Published studies show evidence that this deduction was a regressive tax benefit, favoring households with higher incomes more,” they explain.
Regarding the PP proposal of reduce the Property Transfer Tax (ITP) to 4% for the purchase of second-hand homes, Gestha points out that the impact It will depend on the current tax rate in each autonomous community.