Buying a Home: A Joy Turned Into a Tax Burden
27 December, 2024 | Antonio Beltrán
Buying a home is one of the most significant decisions in many people’s lives. It’s a moment full of anticipation and happiness. However, this joy can quickly turn into an unfair tax burden due to political inaction and the Administration’s revenue-driven motives.
In Spain, purchasing a home is becoming increasingly expensive, and much of the blame lies in the lack of promotion of public housing, both for rent and for sale. For years, policymakers have failed to implement solutions to increase the supply of affordable housing. Now, instead of addressing the root issue, current measures punish both homeowners and buyers with excessive tax burdens.
A recent example can be found in a Supreme Court ruling from December 4, 2024 (Rec. 2810/2023). In this ruling, the Treasury is allowed to recalculate the value of a property for the purposes of the Transfer Tax (ITP) and Stamp Duty (AJD), based on the official appraisal if it exceeds the declared purchase price and there is no reference value from the Cadastre. In practice, this means that even if you have negotiated a fair price for the property, you could end up paying taxes on an inflated value that does not correspond to the actual outlay.
From my perspective, this situation clearly illustrates the Administration’s revenue-driven approach. The real estate sector is already heavily taxed, with levies like VAT, ITP, AJD, property tax (IBI), and municipal capital gains tax, among others. This new approach not only increases the burden on buyers but also creates uncertainty and distrust at a time when purchasing a home is already challenging enough.
It’s time for authorities to focus on real solutions to improve access to housing, such as incentivizing the construction of public housing and offering support to first-time buyers. Meanwhile, citizens continue to bear the consequences of policies that prioritize revenue collection over the actual needs of the people.
Buying a home should be an achievable dream, not an additional fiscal concern. For this to happen, we need policies that are more committed and fair to those who choose to take this important step.
