The OECD proposes to modify property taxes to balance the market given that, today, it generates a large social gap
Ten years and eleven months of gross salary. That is the effort that, according to the Organization for Economic Cooperation and Development (OECD), Spanish families make to be able to own an “average” home of one hundred square meters. The data, which is actually from 2020, appears in the report on housing taxation in OECD countries, in which it is proposed to modify property taxes to balance the market given that, today, it generates a large social gap.
Those almost eleven years place the Spanish in the middle of a table that includes data from 30 other countries. At one extreme are the United States (4.06 years), Lithuania (6.53), Finland (6.65) and Japan (7.54), and at the other Luxembourg (15.79), Ireland (15 .12), South Korea (16.59) and New Zealand (18.69). More or less on par with Spain are Great Britain (11 years), Portugal (11.4) and Sweden (11.2).
The lack of relationship between the increase in housing prices and the increase in family income makes this effort in Spain today 35% higher than what had to be done two decades ago, when 8.8 years of salary were needed. As a consequence of this gap between the cost of housing and the availability of income to buy it, while for some property generates wealth, for others it only produces economic uncertainty. In other words, while part of the population (generally, the oldest and with the highest income) can obtain investment returns from it by renting or selling the home, another (the youngest and families with less income) can only aspire to pay a rent or take out mortgages that exert more pressure on a weak domestic economy than on a strong one.
To correct these imbalances, the OECD proposes to adapt property taxes (in Spain we would speak of the Real Estate Tax, the IBI) to the real price of housing, something that, they suggest, is no longer so difficult thanks to digitization. On the other hand, he criticizes the rates applied to transactions because, although they may be attractive for the Administration, they can slow down property changes and, therefore, harm residential and labor mobility. It also shows its disagreement with tax incentives for home purchase through credit cost deductions, since “empirical evidence suggests that they do not serve to increase the rate of homeowners” and favor price inflation when housing supply is low. limited.