On March 25 of this year, the Catalan government adopted a series of new tax regulations, that affect those intending to acquire real estate in this territory.

The background of these measures is the serious political and social problem of housing prices. Purchase or rental prices for flats or houses are once again skyrocketing, as they have been at previous times in our recent history.

In a country where almost 14% of the Gross Domestic Product is driven by tourism, the local population is being displaced in historic city centres, replacing family homes with tourist flats or hotels. Furthermore, investment in real estate in the centres of global cities like Barcelona is attractive to international investment funds, which resell the properties to foreign investors who will not reside there but rather keep them as an asset in the form of a holiday home.

These trends in the dwelling market generate great social tension because most of the Catalan society find it almost impossible to access housing: impossible to buy and increasingly difficult to afford to pay the rent in the centre of major towns or tourist areas.

For this reason, the Catalan socialist government has decided to increase tax revenue from the purchase of luxury homes (priced over €600,000), also applying increased rates of 20% for buyers who already own more than 10 residential properties (or more than 1,500 square meters). This increased rate can also be applied to owners of only five residential buildings if the area in which they are located is considered particularly affected by the rise of prices.

However, there are many exceptions to the rule that are worth knowing, so once again we recommend that investors interested in purchasing homes in Catalonia seek advice from a tax expert.

Carlos Prieto Cid

Lawyer

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