HEALTHPLAN MAGAZINE

Spain's new housing law, Ley de Vivienda, is likely to be approved within the next few months, bringing about several changes to help vulnerable people access housing. The law includes several points, such as freezing rental prices in certain areas and prohibiting the free sale of Officially Protected Housing.

One of the key points of the new law is the power given to local councils to financially penalise owners of empty properties through a surcharge on the real estate tax (IBI) of up to 150%. The aim is to tackle Spain's social housing shortage and fill some of the reported 3 million empty homes in the country.

A property will be considered to be permanently unoccupied when it remains empty continuously and without justified cause for a period of more than two years, provided that its owner has four or more houses. If the property has been empty for two years, the surcharge on the IBI may amount to 50%, while it may reach 100% when the owner has more than three unoccupied properties. The top fine of 150% will be applied to owners of two or more properties for residential use that are unoccupied in the same municipal area.

The surcharge will only be levied on homes that have been empty for more than two years without good reason, as well as for property owners with a minimum of four homes in the same municipality. This means that it will not affect foreigners with second homes in Spain who only use them during certain times of the year.

The idea is that more landlords will start renting out their empty homes to avoid the extra charges, creating more properties for rent on the market and hopefully reducing the prices. The amount property owners could pay will depend on the surcharges levied by each of the municipal town halls.

IBI is a local tax that has to be paid once a year by all property owners in Spain, and it serves as a benchmark to calculate all other Spanish property-related taxes. According to data from the General Council of Economists, in Spain, the average amount of the IBI bill is €315 per year. With this extra surcharge, however, the average would rise to €788 for each empty property.

Here are some of the prices that owners of empty properties could pay in various major cities:

- Madrid: Owners would go from paying €438 on average to €1,095.
- Barcelona: Owners would go from paying €397 on average to €992.
- Valencia: Owners would go from paying €290 on average to €435.
- Seville: Owners would go from paying €262 on average to €655.
- Málaga: Owners would go from paying €244 on average to €610.

While this law has been implemented on a national level, several regions have also tried to implement their own laws on empty housing. From early 2023, the Valencian government has introduced an extra tax on empty homes for landlords that own more than 10 properties. This will affect properties that are not up for sale or rent and have been empty for six months or more. In this case, they will have to pay monthly fines. Forecasts from the Ministry of Housing estimate that throughout 2023, a total of €250,000 will be collected in fines if the homes are not put on the market within a period of six months.

Back in 2021, the Basque Country also contemplated a similar plan to introduce economic sanctions on empty properties in the region. However, the mere threat of these fines has already had an impact, as the number of empty properties in the Basque Country has decreased by 25% since the proposal was announced. This demonstrates that financial penalties can be effective in motivating property owners to make their properties available on the rental market and help alleviate housing shortages.

Source

https://www.20minutos.es/noticia/5123376/0/nuevo-impuesto-viviendas-vacias-ley-vivienda/
https://www.thelocal.es/20230302/what-are-spains-plans-to-charge-owners-of-empty-homes-more-tax