The Catalan government, in collaboration with the left-wing Comuns party, has announced plans to introduced a new tax package that will significantly increase the cost of buying property in the region, especially for investors and owners of five properties or more.
The most significant change is a sharp increase in the property transfer tax (ITP) for large landlords—those owning more than five properties—who will now face a 20% tax rate on purchases.
Targeting “Real Estate Piracy”
The measure, described as a response to “real estate piracy” by Comuns leader Jéssica Albiach, is being presented as a way to curb what she claims are speculative practices that drive up housing prices. Economy Minister Alícia Romero echoed this sentiment, stating that the reforms will help ensure housing is used primarily as a place to live rather than an investment vehicle.
The agreement signed today also includes:
- New tax brackets for the ITP, increasing the rate for higher-value properties.
- A doubled tourist tax across Catalonia, with part of the revenue allocated to housing policies.
- Elimination of tax breaks for real estate companies that buy homes for redevelopment and sale.
- A new tax deduction for victims of gender-based violence purchasing their primary residence.
Restructuring the Property Transfer Tax
The current ITP system in Catalonia had only two tax bands: 10% on properties valued up to €1 million and 11% for more expensive properties. Under the new structure, two additional brackets have been introduced:
- Up to €600,000 → 10%
- €600,000 – €900,000 → 11%
- €900,000 – €1.5 million → 12%
- Above €1.5 million → 13%
Large landlords will now be required to pay 20% on any residential property purchase, a significant increase aimed at discouraging large-scale acquisitions for redevelopment.
Social Measures and Fiscal Impact
Existing tax exemptions for young buyers under 32, low-income families, and single-parent households remain intact. Additionally, a new 5% reduced tax rate will apply to survivors of gender-based violence purchasing their first home.
With this overhaul, the Catalan government expects to raise an additional €300 million annually, which will be redirected into housing policies.
Political and Market Implications
The reform package still requires approval through an executive decree and subsequent validation by the Catalan Parliament. The move follows high-profile cases such as Barcelona’s Casa Orsola, where an entire building was purchased, and tenants faced eviction in favour of higher-paying renters—a scenario the government aims to prevent.
“This is about putting taxation at the service of the right to housing,” said Albiach, arguing that the changes will protect residents from predatory investment practices. Whether the policy will achieve its intended effect or disrupt the housing market remains to be seen.
