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Property Tax Burden Increased 53% In Five Years

21/08/2014 – Cinco Dias

Property tax turned out to be the last resort for local administrations as the constribution was the only one among the main sources of public money (PIT, VAT and the Corporate Tax) that has not suffered during the crisis.

Also, unlike the three, the Property Tax, which was established in 1989, has never stopped to rise. According to the data of the General Directorate of Land Registry, from 2008 to 2012, the duty rose by 43%. Specifically, in 2008, the Government collected €8.35 billion, while in 2012 the amount hit €11.93 billion.

The tax burden, measured in percentage of the tax liability over the regional GDP, has increased by 53% over those five years. In 2008, the burden was equal to 0.7% of the total GDP, while in 2012 the figure settled at 1.07%.

Detailed analysis of the information on the regional level shows discrepancies among the Spanish ´communities´. Thus, the tax affected most the pockets of the Andalusian taxpayers (1.49% of the GDP in the five-year period). To compare, in 2008, they had to contribute with €1.44 billion, while in 2012 they owed already €2.1 billion.

Andalusia has overtaken the lead from the Valencian Community, being the number one since the beginning of the recession. In 2012, the tax contribution represented 1.42% of the GDP, with a rise of 40.5%. Next is Murcia (1.33% of the GDP, burden +66%) and the Balearic Islands (1.32%). It is worth to point out that all of them are located on the coast and they mainly focused the real estate boom.

In general terms, Catalonia earned most on the tax and it still does. In 2008, the regional administrations received €1.78 billion flowing from the property tax and five years later – €2.4 billion. After the second position taken by Andalusia, there is the capital, Madrid, earning now €1.97 billion. Once more, noteworthy is the fact that these three regions concentrate 48% of all inhabitants of Spain.

 

Original article: Cinco Días (by Carlos Molina)

Translation: AURA REE