Tax on empty flats levies €11.3 million to provide more social housing in Catalonia

In its first annual collection, a tax raised on banks and other financial institutions maintaining empty flats has generated €11.3 million. When it was first approved, the tax was only expected to raise €8 million. The revenue from the tax is a “very positive” first assessment according to Catalan Minister for Public Administration and Housing, Meritxell Borras. The revenue gained from taxing 198 institutions with flats that remained empty for two years or more will be used to purchase 260 properties for public housing in Catalonia. However, Borras is concerned that the tax will be “endangered” by potential interference by the government in state functions. 

Empty flats and other under construction (by ACN)
Empty flats and other under construction (by ACN) / ACN


April 14, 2016 07:50 PM

Barcelona (CNA).- A tax on empty flats has raised nearly €11.3 million in its first annual collection. The tax was initially expected to raise only €8 million, and was set in place to reduce the number of unoccupied flats while increasing the amount of housing available for rent. The Catalan Government applied the tax to 198 financial and real estate institutions that kept close to 15,000 flats empty in 70 municipalities for 2 years or more. With this revenue, the government will be able to purchase an estimated 260 foreclosed properties to be used for public housing in Catalonia. Although Catalan Minister for Public Administration and Housing Meritxell Borras said the first assessment was “very positive”, he highlighted that generating more revenue from taxes isn’t the government’s only goal. 

“The main objective is not revenue, but the mobilisation of the private housing stock. The top priority of the government is that the empty flats can be used by families and citizens who need them”, Borras said.

Borras estimates that there are still 72 municipalities in Catalonia with high demand for more housing despite the Catalan Government purchasing 184 homes last year. Most of the allocated €8 million was used to purchase 110 homes in Barcelona, with other purchases in Girona (41), Tarragona (29) and Lleida (4).

Tax “endangered” by potential interference from the Constitutional Court

Despite demands for housing, Borras expressed concern that the tax may face “possible challenges to the government in state functions”. Law 14/2015 of the 21st of July currently regulates the tax. Although Borras has asked parties to influence the Spanish government not to challenge the tax, if it comes under scrutiny Borras said the people of Catalonia who need this housing — not the government — will be the ones who are hurt.