As Matías Prats said, allow me to insist. It is not the promoter, nor the landlord, nor the bank. Is public administration. Y It is not a criticism of the Government. Not alone, at least. The communities and town councils are made of gold with this too. With a abusive taxationSpain has become one of the countries with higher tax burden on housing from across the OECD.
Can the housing problem really be solved while the Treasury continues to take the biggest cut? Maybe the solution is for them to stop eating so much of the cake.
Source: Carlos Arenas Laorga with data from the Institute of Economic Studies
Let’s look at this graph. Spain occupies the second place in the OECD in tax pressure on housingonly behind Canada. More than France, the United Kingdom, or anyone else you can think of. How do we achieve it? Easy: adding layer after layer of taxes, fees and taxes in each phase of the real estate cycle.
When you buy: VAT or ITP paid; wWhen you live in it: cough IBI; if you do works: you pay ICIO; yesin turn: you pay the municipal capital gain (IIVTNU); one inherits or gives: taxes on inheritances and donations; and if you rent it: You pay taxes in personal income tax. And not to mention the builders, promoters, etc.
According to the IEE analysis (where I get the data from), Up to 25%-30% of the final cost of a home can be due exclusively to the tax burden.
Much of the blame for high housing prices lies not in construction costs or speculation. For example, in the transfer of a new construction home, 32% of the final price goes to the public coffers. A figure that It equals more than the margin of the developer and the builder… together.
Building a home in Spain is like having a partner who does not put in the ground, nor the brick, nor the risk, but who demands a share of the project from the first plan until after handing over the keys. And that partner gets paid even when the business does not generate profits. In football terms it would be like play a match where the referee not only sets the rules, but also scores goals against you. Then he is surprised that there are fewer and fewer players willing to take the field.
And if the project is for rent (so promoted by the administration), things do not improve. Just in case you were wondering if I had forgotten this alternative.
While campaigns are launched against large holders or 100,000 public housing units are promised that never arrive, the real problem remains. Every euro collected by the public administration makes access to housing more expensive and discourages supply. Oh if it were one…
Source: Carlos Arenas Laorga
The lack of housing at reasonable prices is due to the limited supply and the huge amount of taxes. We are talking about 30 billion euros a year in housing collection and that I don’t count VAT (part of this tax is collected from the sale of housing) nor the Inheritance and Donation Tax (part of the collection of this tax comes from housing).
Less hassle and less taxesthat there are many people suffering and having difficulties due to housing.
It is first in economics that, other things being equal, When you artificially make it more expensive to produce or transmit a good, you reduce its supply. and when you reduce their supply, raise the price. You don’t need a PhD.
Maybe the time has come to change the chip. The solution is not more State. It’s less. Instead of continuing to propose more or less magical solutions to the housing problem, many of them interventionist, populist, expensive and with few results, why not start with the simplest?
- Reduce and eliminate distorting taxes.
- Simplify property taxation.
- Encourage (really) rental and investment with legal certainty.
If we want more housing, let’s start by not penalizing it and loot it. When something is taxed to the point of suffocation, we shouldn’t be surprised if it becomes scarce. And if housing is scarce, its price rises. The rest is electoral smoke and political deception. And enough of deception. Of each other, eh? They fill their pockets so much with housing that no one dares to eliminate taxes.