Catalonia will double the tourist tax and raise taxes on large investors

BarcelonaCatalonia will double the tourist tax and allocate 25% of its income to combat the housing crisis. This has been agreed by the Government and the Communes in the framework of a new package of fiscal measures to deal with the impact of tourism and combat property speculation. The increase in the amount will apply to all establishments – from hostels to hotels of all categories, tourist apartments or cruises – and all the municipalities of Catalonia will be authorized to establish a surcharge of up to four euros on the tax, which until now only Barcelona could do. This was explained in a press conference by the Minister of Economy and Finance, Alícia Romero, and the leader of the Communes in the Parliament, Jéssica Albiach. The announcement has raised a storm within the sector, but both have defended making tourists pay more to inject resources into public services. "It is fair," said the Minister. With these changes, the Generalitat expects to earn up to another 100 million euros.

This is not the only measure that the Government and the Commons have agreed on this Thursday in terms of housing. From the meeting between Romero and Albiach, an agreement has also emerged to modify the tax on property transfers with the aim that buyers of flats worth more than 900,000 euros and large holders pay more than the rest. Thus, a new tax rate of 12% will be created for flats worth between 900,000 euros and 1.5 million and 13% for those worth more than 1.5 million euros. Large holders who acquire properties will have to pay 20% (until now they paid 10%) to favour price containment. In addition, anyone who buys an entire building will pay a new rate of 20%, a measure designed for cases such as that of the Orsola house. Albiach stuck out his chest: "Every step we are taking is going in the right direction of making houses a right and not a business."

The package of fiscal measures includes eliminating the bonuses for real estate companies in the property transfer tax and also incorporates a reduced rate of 5% for victims of gender violence who buy a home to live in. In total, the Generalitat expects to collect an additional 200 million euros with these modifications, which will be approved in a decree law that the Parliament must ratify. In addition to the Commons, the Government will go to ERC to approve it. Romero assured that the Republicans know "perfectly" the content of the agreement this Thursday, implying that they count on their votes. During the press conference to announce the agreements, Romero and Albiach showed complete harmony on taxation and housing, issues that in the last legislature had marked some distances between their parties.

As for the extra resources that the Generalitat plans to collect, they should be incorporated into the extended budgets of 2023 through the decree of supplementary credit that the Government is working on. At the moment, already waiting to tie the support to the Parliament of ERC and the commons, it still has no presentation date.

Impact in Barcelona

The increase in the tourist tax will have a particular impact in the case of Barcelona [see table]. The tax varies depending on the type of establishment, but if we take the most expensive – five-star hotels – it reaches 3.5 euros. The city council can add a municipal surcharge of four euros, meaning that visitors staying in the city now pay 7.5 euros. With the new tax prices, they will pay up to 11 euros per person per night, and the price could still increase because the agreement reached in Barcelona between PSC and ERC allows the surcharge to be increased from the current 4 euros to 8. So tourists could end up paying up to 15 euros per night in the Catalan capital.

However, it is not clear that the municipal government will choose to double the surcharge. Both the mayor, Jaume Collboni, and the deputy mayor Jordi Valls, who is responsible for the management of the city's tourism, have always stressed that having room to increase the surcharge to eight euros does not mean that it should be like this. Once the law is approved, the City Council will study how to modify the current surcharge, what rates apply and in what cases.

As for the income obtained directly from the tax –which is distributed 50% between the Generalitat and 50% between the municipalities– the agreement gives more room to the city councils to decide what to use it for. If until now the fund was for a specific purpose and had to be reinvested in aspects related to tourism, now the city councils will be able to choose to use it for housing, economic promotion or cultural promotion. As for the 50% that the Generalitat keeps, 25% will be for housing and the other 25% for tourism promotion.

Hoteliers' frontal rejection: "It's an aberration"

The Barcelona Hotel Association has been quick to criticise the measure, which, they say, will put the Catalan capital at the top of the list of European cities with the highest tourist tax. In a statement, the hoteliers consider that increasing the amount collected contributes to the "fiscal asphyxiation" of the sector and threatens its "competitiveness": "[The sector] is not willing to continue being the constant source of funding for the administrations," the organisation states in a statement.

In statements to Ser Catalunya, which broke the news, the hotelier and member of the Association Joan Gaspart went so far as to describe the increase in the tourist tax as an "aberration" and spoke of a "lack of common sense" on the part of the Government. The businessman has gone a step further and has announced that the measure will force hoteliers to lower prices to maintain profit margins and that the "consequences" will be paid by the workers and their salaries. "I'm not saying that salaries should be lowered, but logically if a company's costs rise, when it comes to negotiating a salary increase..." he suggested, adding that "the Generalitat should be aware of this."