{"id":613140,"date":"2025-12-04T19:00:29","date_gmt":"2025-12-04T16:00:29","guid":{"rendered":"https:\/\/alegria-premium.com\/?p=613140"},"modified":"2025-12-11T19:02:21","modified_gmt":"2025-12-11T16:02:21","slug":"construction-sector-demands-tax-cuts-to-make-housing-more-affordable","status":"publish","type":"post","link":"https:\/\/alegria-premium.com\/en\/articles\/construction-sector-demands-tax-cuts-to-make-housing-more-affordable\/","title":{"rendered":"Spain\u2019s Construction Sector Calls for Tax Cuts to Make Housing More Affordable"},"content":{"rendered":"

The National Construction Confederation (CNC) has called for a reduction of such taxes as IBI (property tax)<\/a> and IVA (VAT)<\/a>, and has also proposed introducing a series of tax deductions on the purchase and sale of housing in order to make it more affordable. Currently, around 14 taxes and fees applied to this sector account for about 25% of the final price of housing, and in some cases can reach 30%.<\/p>\n

CNC proposals to reduce the tax burden on the purchase and renovation of housing<\/h2>\n

In particular, the CNC calls for the introduction of a super-reduced IVA rate of 4%, a reduction of the property transfer tax (ITP) or the tax on documented legal acts (AJD), as well as clarification of the tax base of the local tax on construction, installations and works (ICIO). It is also proposed to temporarily apply the super-reduced VAT rate (4%) to housing renovation in order to stimulate supply in this area and to improve the efficiency of Spain\u2019s increasingly ageing housing stock, where more than seven out of ten buildings have insufficient energy performance.<\/p>\n

In addition, employers in the construction sector are asking for an extension of inheritance tax<\/a> relief on primary residences so that some heirs are not forced to sell the property in order to pay it. According to the CNC, Spain leads Europe in the maximum rate of this tax.<\/p>\n

On the other hand, the National Construction Confederation proposes adjusting capital income from real estate for inflation and avoiding its double taxation. To this end, taxes paid to other authorities should be directly deducted from the amount, and only the real capital gain should be taxed \u2013 that is, fully correcting the effect of inflation.<\/p>\n

Another proposal is to reduce inconsistencies between tax bases \u2013 especially those that contrast IBI (property tax) with ITP (property transfer tax), AJD (tax on documented legal acts) and inheritance and gift tax. As for the property tax, employers believe that it is necessary to agree on lowering rates and allow municipalities to adjust them in line with local needs, applying progressive benefits for investments in structural improvements and energy efficiency.<\/p>\n

In addition, the CNC believes that it is necessary to clarify the tax base of the local tax on construction, installations and works (ICIO) and reduce its impact on investment by stimulating urban regeneration through partial rebates for renovation projects. This would help avoid duplication with municipal fees and an unjustified increase in costs.<\/p>\n

A number of tax proposals put forward by the CNC are aimed at reducing the final price of housing<\/a> and stimulating the market, where the lack of supply is causing an unprecedented housing crisis in Spain. At the same time, the tax burden in a purchase and sale transaction is not only excessive but also extremely bureaucratic.<\/p>\n

Multiple taxes on real estate transactions and construction<\/h2>\n

In the case of the sale of a plot of land:<\/p>\n