High Taxes and Their Impact on the Housing Market
In recent years, apartment prices in Catalonia have continued to rise, making homeownership increasingly difficult for many residents. Experts point to high property transfer taxes (ITP) as a key factor, with rates in Catalonia far exceeding those in other Spanish regions. For example, in Madrid this tax is set at 6%, while in Catalonia a progressive scale applies, reaching up to 13% for high-value properties. As a result, buyers are forced to pay tens of thousands of euros in taxes alone, which significantly raises the total cost of purchasing a home.
Potential Changes and Their Consequences
Economists and tax experts note that reducing or eliminating the ITP could significantly ease the home buying process, especially for first-time buyers. They argue that such a measure would not only make housing more accessible but also stimulate market activity. For example, calculations show that for a €500,000 apartment, the difference in tax payments between Madrid and Catalonia can reach €20,000, and for premium properties, the gap becomes even more substantial.
Starting June 27, 2025, Catalonia will introduce additional tax rates for large property owners holding a significant number of residential units or owning more than 1,500 square meters. For these market players, the tax burden will increase to 20%. Experts believe this may impact transaction structures and the region’s investment appeal.
Special Conditions for Certain Categories of Citizens
Catalan authorities claim that the current tax system is aimed at curbing speculation and supporting socially vulnerable groups. Reduced rates—5% when buying a property worth up to €300,000—apply for buyers under 35, large families, single-parent households, people with disabilities, and victims of domestic violence. However, experts argue that these benefits cover only a small share of transactions and do not solve the broader issue.
Debate Over the Future of Tax Policy
Experts emphasize that lowering the tax rate does not necessarily reduce overall budget revenues. An increase in transactions may actually boost tax collection, which is supported by economic theory. At the same time, academic experts note that tax reform alone is not enough to resolve the housing crisis. Comprehensive measures are needed, including expanding market supply and revising urban planning policies.
The issue of reducing the tax burden when purchasing property in Catalonia remains a hot topic among experts, economists, and government officials. It is expected that the discussion will continue in the coming months, and potential changes in tax policy could have a significant impact on the region’s real estate market.
