Vacant Housing in Spain: Where It's Located and What Tax Threatens Property Owners

Vacant Housing in Spain: Where It’s Located and What Tax Threatens Property Owners

The government has included a new property tax rate (IBI) in the housing law for properties that remain vacant for extended periods (more than two years). The surcharge can amount to up to 150%.

After approval of the new regulations, the decision to apply this measure will remain with municipalities.

The latest proposal regarding vacant housing was made by Minister of Transport, Mobility and Urban Development José Luis Ábalos. It consisted of “clearly defining the concept of vacant housing so that municipalities can apply a surcharge to the IBI rate for residential properties that remain unoccupied, establishing a two-year monitoring period and a minimum threshold of four properties per owner.” This exact definition was included in the new law.

Justified cases include: temporary relocation (for work or study reasons), housing change due to health conditions, dependency or social emergency situations, second homes with vacancy periods of up to 4 years, repairs or work preventing habitation, properties with ongoing administrative or judicial proceedings, as well as individuals and legal entities whose real estate is listed for sale (1 year) or rent (6 months) at market conditions.

Vacant Real Estate in Spain

According to the National Institute of Statistics (INE), the number of unoccupied residential properties in Spain was 3.4 million according to the latest official data from 2011. The current figure is unknown at this time.

Of the 3.4 million residential properties, 21.4% were built in the preceding decade (between 2001 and 2011). Another 29.7% consisted of homes older than 50 years, which in absolute numbers exceeds one million.

Location of Vacant Houses

The highest share of unoccupied housing was recorded in Galicia (18.6%), La Rioja (18%) and Murcia (16.6%). By provinces, Ourense (22.7%), Lugo (20.2%) and Castellón (19.5%) led in the number of vacant houses in 2011.

Madrid (-14.2%), Barcelona (-12.4%) and three provinces of the Basque Country showed vacant housing shares below 11% in the 2001-2011 period, while nearby settlements showed decreases thanks to the economic activity of major capitals.

No More Recent Housing Data?

The results of INE’s 2021 population and housing census will have to wait until 2023, however annual data on unsold new housing stock is already available. In 2020, 456,918 properties failed to find buyers. Half of the available new housing stock is distributed between the Valencian Community, Catalonia and Andalusia. At the same time, the largest stock growth was recorded in Madrid — by 4.1% (45,071 properties), while the largest decrease was in the Basque Country (-13%, 2,766 properties) and the Balearic Islands (-8.7%, 7,394 properties).

Spain’s housing stock is another indicator worth considering when analyzing vacant real estate. In 2020, the country had 25.8 million residential properties, of which 19.4 million are considered primary residences. The rest are second homes, totaling 6.5 million. Regions with the largest housing stock: Andalusia (4.4 million), Catalonia (3.9 million), Valencia (3.2 million) and Madrid (3 million).