Catalonia’s harsh new property tax doesn’t just target big landlords—it also hits ordinary buyers with higher budgets, putting more pressure on an already broken housing market.

A sweeping hike in property transfer taxes (ITP) has just come into force in Catalonia (on the 27th of June 2025), hitting high-value homebuyers, property investors, and landlords with large portfolios. But far from being a targeted solution to the region’s housing woes, the new tax regime risks crippling investment and making the housing crisis worse.

The new rules: who gets hit and how hard

From 27 June, anyone buying a residential property in Catalonia for more than €600,000 will pay more in ITP, as will anyone classed as a gran tenedor—a ‘large landlord’ owning more than 10 residential properties or over 1,500 m² of residential space in the region (or just five homes if located in areas classified as ‘strained markets’, which now covers 271 municipalities). The headline change is the new 20% ITP rate for large landlords, but the pain doesn’t stop there.

There’s also a new progressive ITP structure for everyone else buying property above €600,000, replacing the previous flat 10–11% rates:

• Up to €600,000: 10%
• €600,000–€900,000: 11%
• €900,000–€1,500,000: 12%
• Over €1,500,000: 13%

On top of this, a blanket 20% rate now applies to the purchase of entire residential buildings—regardless of whether the buyer is a large landlord or not—unless very narrow exemptions apply (e.g. social housing developers, non-profits, or individuals buying a building of four homes or fewer for personal or family use).

An assault on investment, not speculation

The government claims this tax hike is about fairness and progressivity. In reality, it’s a blunt instrument that penalises the very players most likely to invest in housing, improve the quality of the rental stock, and bring new supply to market.

The 20% ITP rate is especially problematic. It applies indiscriminately to large landlords buying homes, regardless of whether those homes are vacant, need renovation, or will be made available to renters. And while social developers are exempt, the bureaucratic definition of ‘social’ housing excludes most practical, real-world efforts to add decent, affordable rentals to the market.

For residential buildings, the message is just as bad: if you want to buy and refurbish a block of flats in Barcelona, for instance, the regional government will take one fifth of your budget upfront in tax. Unsurprisingly, deals are collapsing, buyers are walking away, and sellers are facing shrinking pools of potential takers.

Disincentives and distortions

Industry players have been sounding the alarm for months. This policy is not just a tax hike—it’s a major disincentive to invest in rental housing at a time when Catalonia desperately needs more supply. The long-term rental market is already one of the least profitable real estate segments, and this new burden will only push more capital elsewhere.

Even before the new rates took effect, transactions were falling apart. Large-scale deals were cancelled, buyers backed out, and sellers saw their bargaining power eroded. In a tense, slowing market, these changes amount to pouring glue into the gears.

Crucially, professional landlords—those most likely to ensure compliance, maintain properties, and offer longer-term tenancy options—are being actively pushed out. This opens the door to smaller, less experienced owners who may not have the capacity or incentives to provide stable, high-quality housing.

What’s really going on?

It’s hard to escape the conclusion that this is more about political optics than effective policy. The regional government talks of “correcting market imbalances” and “fiscal justice”, but its actions seem more rooted in ideology than evidence. The market doesn’t need fewer professional landlords—it needs more homes.

There are better tools available: incentivise build-to-rent schemes, streamline planning processes, reduce construction risk, and target tax relief at projects that deliver real social value. Instead, the authorities have reached for the easy option—tax the so-called bad guys, and hope something good happens.

A regressive step masquerading as progress

Catalonia’s new tax regime will not lead to more affordable homes. It will reduce the appetite to invest, delay much-needed renovations, and worsen the housing shortage. Buyers and renters alike will bear the cost of this short-sighted approach, with fewer homes, higher prices, and a rental market that becomes even more dysfunctional.

Far from fixing the problem, this policy risks cementing it. A housing strategy built on fiscal punishment is no strategy at all.

EMBATTLED prime minister Pedro Sanchez has received a welcome boost after Spain’s Constitutional Court voted to approve a highly contentious amnesty law designed to withdraw legal action against key separatist leaders over their role in the illegal 2017 Catalan independence referendum.

Judges on the court responsible for interpreting Spain’s constitution voted by six votes to four to endorse the law following an appeal lodged by the conservative Partido Popular (PP).

In a press release, the court rejected claims by the PP that the law represents a ‘self-amnesty’, saying that ‘a law debated and approved by the parliament of a democratic state cannot qualify as a self-amnesty’.

It added that Spain’s constitution does not ‘explicitly’ prohibit amnesty laws, and therefore the current proposal is constitutionally valid.

However, it did uphold two key points raised by the PP: the amnesty must apply to people who rallied against the Catalan independence movement – known as the procés – and the law should be limited to events occurring between November 2011 and November 2023. 

READ MORE: Thousands take to the streets of Spain’s Barcelona: Catalunya separatists rally against ‘non-implementation’ of amnesty law which vowed to protect architects of ‘illegal’ independence referendum

The news was welcomed by Sanchez – currently at the NATO summit in the Hague – who hailed the verdict as ‘wonderful news for Spain, for its coexistence and cohesion’.

He added: “We are satisfied because we have always maintained that the law passed by congress would be constitutional, and this has now been confirmed.

“The law was approved by a chamber elected by citizens, underwent debate and appeals, and has now been ruled constitutional by a court.”

Last year, Spain’s Congress formally approved the controversial amnesty law following months of bitter debate.

The conservative, pro-independence Junts per Catalunya party, led by separatist leader and fugitive from Spanish justice Carles Puigdemont, and left-wing Esquerra (ERC) had demanded the law in exchange for handing Sanchez the parliamentary support his Socialist party (PSOE) required in order to command a majority in Congress.

Puigdemont, who has lived in self-imposed exile in Belgium since 2017, was expected to be the law’s highest profile beneficiary, but last year Spain’s Supreme Court ruled that the amnesty would not apply to Puigdemont, who is currently subject to an arrest warrant over the alleged misuse of public funds.

READ MORE: Spain’s Supreme Court rejects amnesty for Carles Puigdemont: Arrest warrant remains for ex-President of Catalunya

The Catalan separatist movement infamously reached its nadir in 2017 with an illegal referendum and a unilateral declaration of independence, prompting the central government of then-prime minister Mariano Rajoy to dissolve Catalunya’s parliament and launch legal proceedings against key separatist figures, including Puigdemont.

The Constitutional Court’s decision will be welcome news for Sanchez after a tricky couple of weeks at home and abroad, with the prime minister’s coalition dependent on support from regional separatist parties.

Sanchez’s government is currently mired in a succession of corruption scandals, while President Trump recently threatened to double tariffs with Spain after Sanchez refused to sign up to NATO’s spending target of 5% of GDP on defence.

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