Lost opportunities with the ITP reform

This week the hot topic is the ITP or Property Transfer Tax that we must pay when we want to buy a second-hand or later transfer flat. New flats are subject to 10% VAT. Until now, the ITP was 10% in general and 5% for young people under 32 years of age. Now, the Government has agreed to a modification for Catalonia, which raises the 5% up to 35 years of age, creates 10 to 13% brackets depending on the value of the property and raises it to 20% in the case of large holders.

Let's start with the opportunities for young people. Reducing the tax is a great success, but only for those who earn less than 36,000 euros gross per year, that is, 2,200 euros net per month. I have always asked myself the following question: if you are already paying rent (which takes up half of your salary) and you live day to day, when can you save for the down payment on a flat? Consider that for a flat worth 250,000 euros, the down payment is 50,000 euros, apart from expenses and taxes (about 30,000 more). Therefore, raising the age to 35 seems to me to be a success, provided that the income received by the person is also raised. Raising the age range leaves more time to save the resources needed to face the purchase.

35% of the homes bought in the State in the last year did not need a mortgage and surely, the great majority are from investors who do not doubt that, in some way, they will avoid paying the 20% tax. The doubt that remains is the following: if we are aware of the difficulties of access to housing, why have we not taken advantage of the fact that we raised the tax at the top, to reduce it at the bottom and encourage people to buy their habitual residence? In the Community of Madrid they pay a minimum of 6%, in our country, we start at 10%.