Spanish Homes: A Piggy Bank, Not a Necessity

Housing in Spain has become an investment asset for many, overshadowing its function as a basic necessity, a trend driven by the tax system and the interests of various market players.

The debate on housing access in Spain often boils down to supply and demand, but the reality is more complex. For many, a home has ceased to be a roof over their heads and has become a piggy bank, a financial asset promising returns rather than a place to live. This transformation has profound implications for those who genuinely need a home.

## Taxation That Rewards Investment

The state, far from being detached from this dynamic, seems to benefit from it. Every property transaction, especially those of significant value, generates substantial tax revenue. For example, selling a property for **€250,000** can incur **€25,000** in VAT if it's new construction, or **€25,000** in Transfer Tax (ITP) if it's a resale, a percentage that can reach **10%** in regions like **Valencia**. Added to this are taxes such as property tax (IBI), municipal capital gains tax, and income tax (IRPF) on rent. If the sale price were to drop to **€150,000**, the Treasury and Autonomous Communities would see their income reduced by almost **€10,000** per transaction.

## Stakeholders Benefiting from the Status Quo

Several groups benefit from property prices remaining high or continuing to rise. Investors who bought properties at low prices, such as a flat in **Valencia** acquired for **€70,000** in **2012** which could now be worth **€210,000**, prefer to sell and make a substantial profit rather than rent it out and assume risks. Banks and **Sareb** (Spain's 'bad bank'), meanwhile, manage portfolios of real estate assets acquired at low cost, selling them gradually to avoid saturating the market and causing price drops.

## The Average Citizen, The Big Loser

Politicians and public officials with multiple properties, as well as heirs who receive several homes, do not feel the pressure of the rental market. They can afford to keep properties vacant without urgency to generate income. Added to them are investment funds and foreign buyers, attracted by prices that, compared to those in other major European cities like **Berlin**, seem like a bargain. The average worker, with incomes ranging between **€1,200 and €1,500** per month, bears the brunt of this system, indirectly paying for others' antiestéticast and unable to access decent housing.