Economy and Territory differ from the concept of a large housing owner

The definition of a large property owner included in the resolution on the increase in the Property Transfer Tax (ITP) to 20% has surprised part of the legal and real estate sector. Various professional associations and organizations have warned that the Department of Economy and the Department of Territory and Housing apply different criteria to determine when an individual or legal entity is a large property owner and, therefore, is subject to the new Government regulations.

The General Directorate of Taxes and Games, under the Ministry of Economy, published a resolution on June 27 to clarify how the decree-law raising the property transfer tax (ITP) to 20% for large property owners should be applied. This measure, agreed upon between the Generalitat and the Comuns (Commons) in February, has generated strong opposition among businesses. This resolution indicates that the property of habitual residence should not be counted toward being considered a large property owner, arguing that doing so would violate Article 47 of the Constitution. Thus, a large property owner is considered to be any individual or legal entity that owns five or more homes within the stressed market zone, which is virtually all of Catalonia, provided that none of these homes are their habitual residence. In contrast, in the sectoral regulations on housing, the property of habitual residence is counted toward defining a large property owner.

The assumptions included in the resolution on the increase in the ITP have surprised the legal and real estate sectors.

Thus, a person with five apartments (including the one they live in) is considered a large property holder for the purposes of the Urban Leasing Law (LAU), but this same person would not be a large property holder if they buy or sell these properties for the purposes of the Property Transfer Tax (ITP) increase. The resolution on this tax includes other differences with the regulations currently applied to housing. For example, ownership of the property. The Ministry of Economy indicates that to be considered a large property holder, they must own 100% of the property. If they have a smaller stake, those whose properties total more than 1,500 m2 of built area will be considered large property holders. However, according to the LAU, it is sufficient to own more than 50% of the property.

The Department of Economy explains that sectoral regulations for housing and taxation are distinct, and that each can establish "specific regulations based on the sector's purposes and circumstances."

The regional ministry also points out that these interpretative criteria arose from joint work with the Catalan Tax Agency and from issues raised by professional associations and colleges. They also point out that the decree-law regulating the 20% increase in the Property Transfer Tax (ITP) is being processed as a bill in Parliament, and "all amendments submitted by the groups to improve it" will be considered.