Catalonia tightens real estate taxation: new tax rates and restrictions for large holders

New measures have been introduced in Catolonia to address its housing crisis by significantly increasing taxation for large holders and high-value transactions, while redefining access to allowances and reduced rates.

The tax changes are included in Decree Law 5/2025, which was approved by the government of the Generalitat of Catalonia on 25 March and published in the Official Gazette on 26 March. The measures will come into effect three months after the day following its publication on 27, with the exception of one and include changes relating to transfer tax (ITP) and stamp duty (AJD).

Decree Law 5/2025 also introduces changes in the areas of income tax (IRPF), inheritance tax (ISD) and other taxes managed locally.

New tax bands for transfer tax 

A new transfer tax (TPO) tax scale has been approved, applicable to the transfer of real estate and based on the value of the property transferred. This scale replaces the previous model of two bands: 10% as a general rate and 11% for the portion of value exceeding €1 million. With the entry into force of this new regulation, the transfer of real estate will be taxed according to the average rate resulting from the following bands:

• Up to €600,000: 10%.
• Between €600,000 and €900,000: 11%.
• Between €900,000 and €1,500,000: 12%.
• Over €1,500,000: 13%.

The base on which the second band of the scale applies is modified and two additional bands are created, with rates of 12% and 13%, increasing the taxation of properties valued over €600,000.

TPO of 20% for large holders and entire buildings

The regulation introduces an exception to the previous scale and establishes a fixed rate of 20% for TPO applicable to:

• Acquisitions of residential properties by large holders. In Catalonia, large holders are considered to be individuals or legal entities that own more than 10 residential properties or properties with a built area exceeding 1,500 m² or five or more urban residential properties located within a stressed residential market area declared by the Generalitat. Garages and storage rooms are excluded from this count. Acquisitions made by social promoters or non-profit entities, and by large holders who use the acquired property as their headquarters or workplace are excluded from this increased rate.
• Acquisition of entire residential buildings, with or without horizontal division. If the building is transferred gradually, the tax returns submitted by the taxpayer for each partial transfer will be considered provisional. In the final tax return, the taxpayer must regularise the situation by applying a 20% rate on the total value of the building, deducting the amounts already paid in previous tax returns and adding the corresponding late payment interest. Acquisitions of entire residential buildings with a maximum of four dwellings are excluded from this increased rate, provided that the buyer is a natural person and all the dwellings constitute the habitual residence of the buyer and their relatives up to the second degree of kinship.

Elimination of 70% TPO allowance for real estate companies

Real estate companies are those whose main activities include building construction, real estate development and the purchase and sale of real estate. Until now, these companies enjoyed a 70% allowance on TPO when acting as purchasers, provided certain requirements were met, such as the acquired property being resold within three years (thereby avoiding double taxation within a short period of time). The allowance is eliminated from 27 March.

Stamp duty increase in case of waiver of VAT exemption

The gradual fee for notarial documents in AJD, which taxes the documents of real estate transfers with a waiver of VAT exemption, is modified, increasing from the current 2.5% to 3.5%.

Allowances to promote residential use 

Additionally, 50% allowances in TPO and AJD are introduced for more specific cases, such as the transfer of:

• Office buildings or unfinished structures for their transformation into official protection housing.
• Properties intended as headquarters or workplace of companies or professionals.

Osborne Clarke comment

Although the declared aim of these measures is to facilitate access to housing, they could have counterproductive effects. Instead of incentivising supply, the tightening of taxes on large holders and resale transactions may lead to the withdrawal of assets from the sales market, reducing the available housing supply. This reduction in supply could increase demand pressure, driving up prices and making access to housing even more challenging.

It is also worth noting that some of the approved measures, such as the increase in the AJD rate or the new scale in TPO, do not align with the stated aim of the new measures and are simply introduced to raise revenue.

Companies and individuals active in the sector will need to review their tax and acquisition strategies in light of the new regulatory framework.