Scrapping housing taxes for under-35s in Spain: who actually gains, and a better design

Of all the housing proposals in Democracia 21's launch speech, this is the one people will remember. Miriam González told the audience in Madrid on 10 October that, while the housing problem lasts, all housing taxes should be removed for every young person under 35. She tied it to a target: if young people are earning €1,300, the most they should spend on renting or buying a home is €350. Europa Press quoted her saying eliminar, remove. Other coverage of the same speech says rebajar, lower. Either way the direction is clear, and it deserves a serious look, because the aim is right and the details decide whether the money reaches young people or the people selling to them.

What is taxed today

When you buy a home in Spain, the Agencia Tributaria explains, a new home sold by a developer pays VAT, 10% as a rule and 4% for protected housing under the special regime. A resale home, which is most of what young people can find, pays the property transfer tax, ITP, to the regional tax office. ITP is set by each region. In the consumer association OCU's 2024 table, the general rate ran from 6% in Madrid up to between 8% and 13% in the Balearic Islands, with stamp duty on the deed (AJD) of between 0.5% and 1.5% on top.

Several regions already treat the young differently. OCU's table lists 3.5% ITP for buyers under 35 in Andalusia, 4% for under-36s in Castilla y León and Cantabria, and 3% in Murcia for buyers up to 40 within income limits, among others. So the idea has been tested in part, region by region, usually with caps on price or income.

Where a tax cut ends up

A tax on buying a home is a bad tax. It penalises moving: a family that needs one more bedroom, or a worker who gets a better job in another city, pays again every time. Cutting it is good policy in principle, and on this point the market-liberal tradition is right.

The question is who keeps the money. The cleanest evidence comes from Britain. Economists Besley, Meads and Surico studied the 2008–09 stamp duty holiday in a paper published in the Journal of Public Economics in 2014. On average, a tax saving of about £1,500 reduced the after-tax price buyers paid by around £900. About 60% of the gain went to buyers and the rest to sellers. That was during the financial crisis, in a weak market. Sales jumped by around 8%, and most of that effect reversed quickly once the holiday ended.

The 2020–21 holiday, during a hot market, looked worse. The Resolution Foundation found prices rose 13% for the groups of buyers with least savings, compared with 7% for those with most. It estimated £4.7 billion of revenue forgone in England and Northern Ireland and judged the holidays wasteful, more than inflationary. Spain today looks much more like 2021 than 2009: our piece on the shortage sets out how far completions lag behind new households. When homes are scarce, the seller sets the price, and a tax break for the buyer becomes, in part, a higher price for the seller.

Who among the young buys

The second question is which young people would gain. To buy, you need a deposit, and in Spain the deposit usually comes from savings or from family. The Youth Council of Spain's emancipation report, as covered by Euronews in May 2026, puts the share of 16-to-29-year-olds living away from their parents at 14.5% in 2025. The average young person's net salary was around €1,190 a month, and renting a flat alone would take 98.7% of it; a room in a shared flat takes about 33.6%. Those numbers show that for most young people the problem starts well before any tax bill. They rent, or they stay at home. A cut aimed only at buyers reaches the minority who can already buy, often with help from parents.

A better design

The left is right that help should go to young people without family wealth, and that has to include renters. The right is right that transaction taxes are damaging and should come down. The idea that fits neither camp is to change what housing tax falls on. A recurrent tax on the value of land can't be passed on by building less, because nobody can make more land, and it rewards putting land to use. It falls on the windfall that public investment and scarcity hand to landowners, and it leaves the person who moves house alone.

Put together, that gives a version of the proposal we would support. Keep the zero or near-zero transfer tax for under-35s, but on a first home with a price cap set by area, so it doesn't subsidise expensive purchases. Apply it first to newly built and protected homes, where a tax cut can turn into more construction instead of a higher price for an existing flat. Give young renters help of equal value, for example public insurance against unpaid rent, which lowers the guarantees landlords demand. And put a date in the law for the shift from transaction taxes to an annual land tax, so the cut stays affordable for the regions that live off ITP.

González's target of €350 out of €1,300 is a good yardstick. It should be measured every year and published by region, so voters can see whether the tax cut, or anything else, is bringing it closer.