The PSOE (Spanish Socialist Workers' Party) has pulled out all the stops to address the housing crisis in Spain. The Socialist Parliamentary Group submitted a broad bill to the Congress of Deputies this Thursday to ease congestion in the residential market, with measures aimed at limiting tourist apartments, curbing home purchases by non-resident foreigners , ensuring the sustainability of public housing stock, and incentivizing lower rental prices. The proposals are notable for their fiscal nature, as well as for regulatory changes to try to expand the available housing stock.

The initiative was unexpectedly presented after a meeting between the Minister of Housing and Urban Agenda, Isabel Rodríguez, and the Socialist spokesperson in Congress, Patxi López, along with other representatives of the group. It completes the package announced in January by Prime Minister Pedro Sánchez. The series of measures follows the philosophy of the prelude outlined by the Prime Minister almost six months ago , but goes into much greater detail. "There's too much Airbnb and not enough housing," the Prime Minister said at the time in summary.

The proposal, despite its ambition, comes in a complicated parliamentary context for the Executive, which governs in a minority and requires the support of partners with often opposing positions to advance any initiative. The fragmentation of Congress and tensions with some of its usual allies mean the process is still far from receiving the green light. Despite this, the Socialist group has stepped on the accelerator: it registered the proposal this Thursday because this week is the deadline for initiatives to enter the final plenary session before the summer break.

The plan seeks to consolidate housing as the fifth pillar of the Welfare State, guaranteeing the right to decent and adequate housing and preventing speculation. Not surprisingly, the document details, "we are facing one of the major problems facing our society today." The package is structured around three axes: building more housing to address the housing shortage , estimated at between 400,000 and 450,000 homes; improving regulations to limit a "wild market"; and increasing aid to the most vulnerable groups.

Among the proposed measures are an increase in VAT on tourist apartments to 21%, so that they are taxed as an additional economic activity, and the creation of a new state supplementary tax on home purchases by non-EU citizens and non-resident foreigners , in order to prevent, or at least complicate, speculative acquisitions. The tax, according to the proposal, will double the transaction price, although it has some loopholes. For example, it will not affect entrepreneurs or professionals in the exercise of their economic activity.

To ensure the sustainability of the public housing stock, it is proposed to regulate the transfer of land and State Assets to SEPES, and to amend the Law on Public Administration Assets to permanently limit the sale price of publicly owned homes.

In parallel, the PSOE (Spanish Socialist Workers' Party) has presented a sort of extension to the housing law to extend net rental income discounts in the state bracket of personal income tax to areas that have not been declared as stressed , a step that corresponds to the regional governments and has only been carried out to date in Catalonia. This way, all landlords in Spain could lower their rents to comply with the official price index and apply the contemplated tax benefits, even if the autonomous community of residence decides not to apply the law.

For example, when a contract is updated and the new rent is below the thresholds set by the Ministry of Housing (limits that are not yet defined, but could be those of the official price index), the rental income will be reduced by 100% in personal income tax. Meanwhile, if the price is reduced by 5% compared to the previous contract and the tenant is under 35 years old and the house is in a stressed area, the reduction will be 95%. If the house is not in a hot zone, but the tenant is young, the reduction will be up to 85%.

The PSOE also proposes toughening the taxation of listed real estate investment trusts (SOCIMIs), which will be taxed from 15% to 25%, unless the properties are intended for affordable rentals. It also proposes increasing the tax rate for vacant homes, with the aim of "incentivizing their entry into the rental market."

The range of socialist measures also includes a tax penalty for those who maintain empty homes , especially those with significant real estate assets, thus incentivizing them to rent them out. By imputing real estate income to personal income tax, the proposal replaces the current flat rate with a progressive scale based on the property's cadastral value: from 1.1% for values ​​up to €100,000, to 3% for those exceeding €1 million.

In the tax area, a modification to the Personal Income Tax law is also proposed to extend tax deductions for energy renovation projects until 2025. A change to the Public Sector Contracts Law is also suggested to promote public-private collaboration in housing construction and address the housing shortage, as well as an update to the tables for increasing the value of urban land.

The context for presenting this series of proposals could not have been more propitious—or more urgent. In recent months, social pressure surrounding housing has been increasing. Rental prices continue to rise in many cities, especially in capitals such as Madrid, Barcelona, ​​Palma de Mallorca, and Málaga, where the weight of tourism and the scarcity of available supply are stifling the renter population. Buying and selling, with a sustained increase in transactions, has become more expensive, and per square meter is more expensive than ever. And tourist apartments, whether legal or not, have become a predominant part of the political and public debate.

From the left of the government, the usual partners—ERC, Bildu, and Podemos—have intensified their demands for the executive to act more decisively. Within the coalition itself, Sumar is also redoubling the pressure on the PSOE. The parties are demanding, among other things, more aggressive price caps on rentals, a ban on tourist apartments in stressed areas , and even the elimination of tax benefits for property owners.