PSOE think tank proposes tax reform and a major expansion of social housing

The Avanza Foundation, the PSOE’s think tank, has proposed a broad overhaul of Spain’s housing market, combining a larger public role in construction with tax changes aimed at discouraging property accumulation. The party is expected to incorporate parts of the proposals into its election platform, according to the report published by El País.

Under the plan, the state would use land held by public companies and port authorities to build affordable rental homes. Avanza says the share of households living in social housing should rise from 3.5% to between 10% and 15% over 15 years. The proposal draws on housing models in Austria, the Netherlands and Denmark, while presenting construction as a long-term priority. Rent caps are described as a possible emergency measure.

The foundation also calls for changes to property taxation. It proposes redesigning the property tax, known as IBI, so that land is taxed more heavily than buildings, and introducing an income-tax imputation linked to a property’s construction value. The stated aim is to shift some of the tax burden from work and productive activity towards land income and reduce incentives to accumulate properties.

For tourist rentals, Avanza proposes tax treatment similar to that of the hotel industry, particularly for VAT, and limits on new licences in municipalities facing the greatest housing pressure. The report also urges authorities to release public land for development and calls for measures to prevent homes built with public funds from losing their protected status.

Other proposals include public, interest-free loans to help people under 40 buy their first home; support for nonprofit housing associations with regulated rents and preferential financing; and shorter administrative procedures. The report also calls for public compensation to landlords affected by eviction suspensions, arguing that payments promised since 2020 have been slow and uneven across regions.

Avanza describes the package as a broad new social contract for housing involving all levels of government and other parts of the sector. Some of its proposals, including changes to land-use legislation, would require substantial political support to implement.

Sources: El País Economía.