Barcelona's luxury hotels dodge an IBI hike due to PSC-Comuns disagreement

BarcelonaLuxury hotels in the city of Barcelona dodged a double tax increase this Friday. The disagreement between PSC and Barcelona en Comú made it impossible to approve two measures that sought to increase the contribution that these establishments and their clients make to the city. The City Council plenary session rejected the part of the fiscal ordinances that, among other things, aimed to increase the IBI (property tax) paid by luxury hotels to 1.3%. A rejection that the 'comuns' justified in part by the municipal government's refusal to increase the tourist surcharge for five-star hotels to 8 euros immediately.

The plenary session had to decide this Friday on three different fiscal packages: a gradual increase in the tourist surcharge for port-of-call cruises –those that spend less than 12 hours in the city– until they pay 24 euros by 2030; a one-euro reduction in the surcharge paid by tourists staying in hostels, and fiscal ordinances whose main change was the increase of the IBI for luxury hotels to the legal maximum. The first two were approved with the support of PSC, ERC, and Junts, and the third was rejected because it only received the support of socialists and republicans.

"You are doing a favor to the tourism lobbies today," declared the fourth deputy mayor, Jordi Valls, to the 'comuns' after a harsh exchange with the group's leader in the council, Gemma Tarafa. The municipal head of Economy recalled that the increase of the IBI to 1.3% starting in 2027 was an agreement previously closed between himself and the 'comuns', and questioned why they have now let it collapse. Tarafa counterattacked by accusing the government of already raising the surcharge for port-of-call cruise passengers to the maximum this year and of refusing to also raise the tourist surcharge for five-star hotels to eight euros now. "Do you really want to disincentivize port-of-call cruises? Or just mask it?" she asked.

The law allows city councils of cities like Barcelona to apply a differentiated IBI rate to the 10% of properties with the highest value in the city, a category that in Barcelona includes 233 properties, of which 203 are luxury hotels. The fact that the increase of this IBI to 1.3% –the limit set by law– has not prospered will mean that these properties will fail to contribute around 4.5 million euros to the municipal coffers, an amount similar to what the 'comuns' also wanted to collect with the increase of the tourist surcharge to eight euros for five-star hotels.

Regarding cruise ships, the approved measure establishes that the surcharge increase will be gradual. Thus, in 2027 this surcharge will go from the current 5 euros to 12, and then it will increase by four euros each year until it reaches 24 euros in 2030. The City Council calculates that, if the current number of port-of-call cruise passengers is maintained, by 2031 the surcharge on port-of-call cruise ships could leave up to 23.7 million euros more in the municipal coffers.

Part of this surcharge will be allocated, as agreed by the municipal government with ERC, to finance a free school reinforcement program and expand the 'Tardes Educatives' extracurricular program. In fact, the plenary session later approved a proposal from the republicans to certify this commitment. "Now we can ensure that those who visit Barcelona at least pay for a better childhood in the city," celebrated the republicans' mayoral candidate, Elisenda Alamany, who stressed that "extracurricular activities are not a privilege, they are part of a full childhood in the city."

The Cruise Lines International Association (CLIA), the cruise industry trade group, has stated that it shares the City Council's goal "to move towards a more sustainable and balanced tourism model," but has considered the surcharge increase "disproportionate." In a statement, they also brandished a study from the University of Girona which concludes that cruise passengers represent, on average, only 2.5% of Barcelona's daily visitors; they exceed 5% only 32 days a year and are never above 7.5%.

Without ordinances for the second time

With the failure this Friday of the fiscal ordinances, the mayor of Barcelona, Jaume Collboni, culminates a term in which the municipal government has not been able to approve any budget through the ordinary procedure and only two of the four fiscal ordinances. The PSC executive still has one last opportunity with the final accounts before the elections, although it seems difficult for it to be able to approve them after having lost the ordinances this Friday and with the groups already in a pre-campaign dynamic.