The honeymoon between employers and the Generalitat is over

BarcelonaThe employers' association Foment del Treball and the Association of Developers and Builders of Catalonia (APCE) have attacked this Monday the decree law agreed between the Government and the comuns that, among other measures, increases the tax on property transfers (ITP) - what is paid when a second-hand property is acquired - in the case of large holders and transactions of more flats. The president of Fomento, Josep Sánchez Llibre, has criticized that the Government has passed the norm without consulting the sector and has added that it will worsen access to housing.

Since the investiture of Salvador Illa, the Catalan executive and Fomento - the employers' association that groups mainly the largest companies in Catalonia - They had maintained a very fluid relationship"Until now we have had complicity," said Sánchez Llibre about the relationship between the employers' association and the Government, as they shared "global approaches to create a roadmap" to make the Catalan economy "competitive" again so that it "regains its leadership of the Spanish economy."

Last week, however, the Generalitat approved an increase in two taxes (both measures included in the same decree approved last Friday) that are sensitive for Fomento: the tourist tax, which affects one of the largest sectors of the Catalan economy, and the property transfer tax, which affects the purchase and sale of flats. Both measures have been approved behind Fomento's back: "There has been no prior negotiation with the sector," said Sánchez Llibre.

Of the two Catalan employers' associations – the other is Pimec, which groups together medium and small companies – Fomento is the one that most advocates tax reductions. In fact, last April The Ministry of Public Works has described Catalonia as a "tax hell". Furthermore, the decree is the result of an agreement between the PSC and the Comuns, a party that has traditionally had a tense relationship with Fomento and which became even more strained during Ada Colau's mayoralty in Barcelona, ​​​​when the employers' association criticized a good part of the council's policies. In addition, the PSC recently approved, with the support of the Comuns and ERC, the elimination of the reduction of the gambling tax in BCN World, a project that has the support of Foment.

Criticism of the housing decree

Faced with this situation, Fomento has counterattacked with a tough joint press conference by Sánchez Llibre and the president of APCE, Xavier Vilajoana, who is also a member of the Foment board. Both organisations vehemently expressed their "serious concern" about the decree and assured that "it will lead to increased housing costs", according to Sánchez Llibre, who wanted to "modestly denounce" the situation.

The complaints of the promoters and the employers' association about the decree that affects housing are diverse. On the one hand, Sánchez Llibre criticised the increase in the transfer tax, which until now was 10% or 11% and which with the new regulation would increase up to 13% for the most expensive homes. This tax is paid by buyers of second-hand flats (new flats have VAT), so the tax increase would mainly affect, according to the Government and the Communities, people who buy more expensive flats (with a price higher than 900,000 euros) and, therefore, those with a higher level of income. In Catalonia, in 2023 the average price of a 100 square metre house was about 245,000 euros.

Sánchez Llibre has regretted that the change goes in the direction of increasing the tax on property transfers by between 30% and 100% and a difference of 400% in some cases with the rest of the autonomous communities, where the tax is 5.5% on average. "With an agreement like this, wealth is not redistributed, misery is redistributed," said the president of Fomento.

For his part, Vilajoana has been even more forceful against the Generalitat: "We are disappointed and very angry," he said. "We are tired of them legislating from one day to the next without knowing how the housing market works in our country," he added about the executive, whom he accused of suffering from "supreme ignorance." Vilajoana recalled that the real estate sector generates a collection of 7,000 million euros annually in the public treasury. "Do you know who really does business with real estate activity? The administrations," he declared.

Vilajoana has also criticized that the new regulations, which are already temporarily in force (they must be validated by the Parliament, and then it will be definitive or will expire if it is not approved) raise the transfer tax up to 20% when the buyer is a large housing owner (a company or person with 10 or more). In this sense, what bothers developers the most is that they are included as large holders for owning homes, when they simply have them to sell because they are building them.

Open to dialogue

Despite the sector's indignation, both Fomento and APCE hope that the Government will talk to them in order to withdraw some of the measures, although Vilajoana regretted that in recent years all administrations have approved a large number of legislative changes in the real estate sector without discussing them with businessmen and that many end up backing out. "Rectifying once is wise, rectifying 32 times is incompetent," he added.

In this sense, Fomento did not like the increase in the tourist tax either, which will double (from 3.5 to 7 euros per person per night in the highest case) and which opens the door to further increases of up to 8 euros in all municipalities, a power that until now only the Barcelona City Council had. According to Sánchez Llibre, this Monday afternoon representatives of the tourism sector will meet with the Government to "try to discuss and modify" the tax increase, following a statement from the employers' association on Friday, in which it expressed "its total rejection of this radical increase."