Property sales and paperwork taxes for luxury properties are up. | Archive

On Monday, Balearic government spokesperson Iago Negueruela defended the increase in tax on documentation for the purchase of properties valued at one million euros and more. "If someone can buy a home for that price, they also have money to pay the corresponding taxes."

The minister didn't believe that this measure will discourage purchases, while he added that there is to be a tax reduction in respect of homes valued at under 270,000 euros.

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The ABINI association of national and international real estate agencies, which has been the harshest critic of the government, in particular its talk of a residency qualification for buying properties, says that the tax on paperwork will not only affect wealthy foreign buyers. The association points to the Balearics having the highest property taxes in Spain and believes that the government is "engaged in a battle" against purchases by non-residents.

The association maintains that tax increases in the Balearics, combined with new taxes from the national government, are leading to "a worrying number of people" withdrawing from the Balearic market - a number that will not be recovered. As to the tax reduction for properties under 270,000 euros, the ABINI insists that this is an "insufficient" measure because there are few homes for that price.

"The property sector and the public are being kidnapped by a system that has not known how to put housing at the service of residents, which has generated the highest fiscal dependence on housing taxes in public accounts ever known, and has done nothing to modernise an anachronistic housing system that is a burden for all residents of the islands. Instead of generating more income, all these increases will achieve the opposite."