Skip to content
The State still subsidizes mortgages from the property bubble years with 1,700 million per year

The State still subsidizes mortgages from the property bubble years with 1,700 million per year

More than three million families in Spain are still recovering in the income tax return (Individual Income Tax) as part of what they pay to the bank on mortgages contracted more than ten years ago, a measure that annually creates a loss of income of approximately 1,700 million euros in the public coffins and that’s over 30,000 since that measure was first abolished in 2010.

Historically the deduction for the purchase of a main residence has been implemented as a tax incentive to help families access their own roofs. However, in practice it became a surcharge paid in advance by developers and real estate agencies after it was applied to the property valuation.

The home purchase deduction has historically been implemented as a tax incentive to help families access their own roofs.

“It can be seen how the deduction was transferred to the final price, so that it was not an incentive for families to buy a house,” he explains. Julius Rodriguez Lopezmember of Economists Facing the Crisis (ECF) and former president of the Mortgage Bank, who recalls how “the end of the house purchase subsidy is spreading throughout Europe. It is a fiscal figure that has been abolished”.

That did not happen and did not stop happening in Spain, where the Irish Language League Government suppressed the deduction Jose Luis Rodriguez Zapatero for houses acquired since January 1, 2011, recovered by the Mariano Rajoy during 2012 and suppressed again, definitively now, as of January 1, 2013 by imposing on the European Commission within the conditions of the financial rescue.

“It has been considered but never done”

Namely, that deduction which reaches 15% of the amount paid in installments and interest on the mortgage during the year with a limit of 9,040 euros, in a similar way to what happens with the rehabilitation, construction and extension of the Ordinary housingstill valid for credits formalized before 1 January 2011 and throughout 2012, but not for the rest.

That means, according to the estimates of the General State Budget, a reduction of 844.4 million euros in this year. tax revenue of the State from which 3.07 million mortgaged people will benefit, who will receive a similar fiscal benefit in the regional department for their declarations.

“The first objective should be to expand the tax base for personal income tax,” explains Rodríguez.

“In some moments where the governments need resources, they have thought about ending the deduction that is still in place, but it has never been done,” explains Rodríguez. In fact, it was the committee of wise men who prepared for the Institute of Fiscal Studies the recommendations report don reform of the Spanish tax system he hints at the subject, which he resolves with a generic note.

“Today is a good time to propose a review of the personal income tax, which will increase the potential of its two basic functions, collection and redistribution”, they point out before explaining that “the first objective should be the base to expand personal tax. income tax, adding those exemptions, reductions, deductions or special regimes that are not justified for their maintenance”, although they are not being communicated.

A tax reduction that benefits one in six families

The main reason for this is to avoid personal income tax reform can be found in the reputational effects that such a measure would have on whoever took it because of its unpopularity, since the 3.08 million beneficiaries of this deduction represent 16.36% of the 18.75 million families already in the countryone in six, who receives an average subsidy of 550 euros.

The number of beneficiaries, the average deduction and the overall impact of the measure has fallen significantly since the access to new mortgagesbasically because the families are gone paying off your loans.

According to data from the Tax AgencyThe 5.64 million beneficiaries who remained in 2011, and who received an average deduction of 716 between the state and regional tranches of personal income tax, in 2020 were reduced to 3.17, which benefited from deductions 614 euros in total.

There has been a significant reduction in the number of beneficiaries, the average deduction and the global impact of the measure

At the same time, there was a decrease of 4,089 million euros public revenue of 2011, of which the State supported 2,021 and the other 2,067 autonomous communities were reduced in 2020 to 1,950, distributed in 969 of state influence and 981 autonomous.

The interest accrues in that period 28,973 million (14,348.7 and 14,624.4), and should be added the more than 1,700 million provided for personal income tax which has just been determined and the nearly 1,700 provided for this year.

A measure that lacks efficiency and progress

“Buying a house is like an investment, although the most important thing is that people can find it at a reasonable price,” the economist says about housing policy and tax incentivesamong them the deduction for acquisition “did not fulfill its purpose because the promoters included it in the price”.

In any case, these facilities are rather ineffective, for those who bought their home ten years or more at the same time as tightening the. conditions of access to the house for a combination of speculative practices and the rising cost of the materials and with the the return of the euribor to the levels of ten years ago.

Along with the inefficiency is the lack of progressiveness

Paradoxically, the lack of progression adds to the inefficiency, since the largest average deduction raises the the taxpayer’s income: in 2020 it reached 460 euros for those who entered a gross of 12,000 per year, it went to 584 for those who earned between 21,000 and 30,000 and it was over a thousand for taxpayers who received more than 60,000.

On the other hand, Rodríguez also predicts a rise in rental prices. “It’s a lot of purchases housing as an investmentto dedicate it to rent, and that is what people on low salaries will have to resort to, and prices will rise”, says the economist, who asks for facilities to build social housing for rent, for example activation lines of credit and/or guarantees for promoters in view of the impossibility of the administrative authorities themselves who promote these works.


Start investing your money in cryptocurrencies and get Free Bitcoin when you buy or sell 100$ or more if you register in Coinbase