Barcelona's luxury hotels dodge a maximum IBI hike

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 these establishments and their clients make to the city. The City Council plenary rejected the part of the fiscal ordinances that, among other things, wanted 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 now.

The plenary had to decide this Friday on three different fiscal packages: a gradual increase in the tourist surcharge for cruise ships in transit –those spending less than 12 hours in the city– until they pay 24 euros in 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 leader of Barcelona en Comú in the council, Gemma Tarafa. The official responsible for the city's 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 he questioned why they have now caused it to fall through. Tarafa counterattacked by accusing the municipal government of already increasing the surcharge for transit cruise passengers to the maximum this year and refusing to also raise the tourist surcharge for five-star hotels to eight euros now. "Do you really want to disincentivize transit cruise ships? Or just dress it up?" she asked.

The law allows city councils in 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– did not prosper will mean that these properties will stop contributing around 4.5 million euros to the municipal coffers, an amount similar to that which the 'comuns' also wanted to collect with the increase of the tourist surcharge to eight euros for five-star hotels.

Regarding cruises, the approved measure establishes that the increase in the surcharge 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 reaching 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 cruises could leave up to 23.7 million euros more in the municipal coffers.

The Cruise Lines International Association (CLIA), the cruise industry association, 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 that concludes that cruise passengers represent, on average, only 2.5% of daily visitors in Barcelona; 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, concludes 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 municipal 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-election dynamic.