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PROPERTY

REVEALED: The financial aid and tax cuts for people who move to a village in Spain

If you're looking to move to a rural part of Spain, you can benefit from financial aid to buy a property, as well as personal income tax breaks.

Published: 3 July 2024 14:07 CEST
REVEALED: The financial aid and tax cuts for people who move to a village in Spain
Financial and and tax breaks to move to a village in Spain. Photo: Vkiller / Pexels

For around the last 10 years, several places in Spain have been suffering greatly from depopulation in a phenomenon dubbed ‘Empty Spain’.

Around 22 million Spaniards live in the 100 most populated municipalities (not provinces) in Spain, according to Spain’s National Institute of Statistics (INE).

This means that around half of the total Spanish population is concentrated in four percent of the national territory.

A lack of jobs, infrastructure and opportunities in rural areas has forced young people to move away, a trend which has been taking place since the days of Franco with Spain’s rapid industrialisation.

Services that did exist such as banking and health services are now also progressively closing down or moving to more populated areas.

READ ALSO: How ‘Empty Spain’ is now a political party

To face the challenge of what’s know as “Empty Spain”, the Spanish government included in its Recovery, Transformation and Resilience Plan a specific section dedicated to aid to help fight against depopulation.

This features many incentives for those who are willing to move to the countryside and help repopulate empty areas.

The aid aims to promote the economic and social rejuvenation of these areas by supporting innovative and sustainable projects that create jobs. 

Digital nomads have been facing a lot of backlash in Spain recently, blamed for increasing rental prices and gentrification in cities, but the fact is that if they’d be willing to move to the countryside, they’d not only be able to gain incentives and tax breaks, but also offer a new lease of life to areas that desperately need it.

READ ALSO: Spain’s Catalonia to offer up to €40,000 to renovate rural properties

The total budget allocated to helping combat ‘Empty Spain’ is €10 billion, of which €7 billion is coming from Next Generation EU European funds.

The ‘Repuebla Plan’ is an initiative that seeks to combat the depopulation of rural areas in Spain by offering housing and job opportunities to people who want to move to these areas.

What aid is available?

Aid for buying a home

The State Plan for Access to Housing 2022-2025 includes direct aid to help people under 35 to buy homes in municipalities with less than 10,000 inhabitants.

The aid consists of a subsidy of up to €10,800, with a limit of 20 percent of the purchase price for young adults who buy a home in these municipalities.

The property must be your habitual and permanent residence for at least five years and the prices cannot exceed 120,000. Applicants can also not have an income that exceeds €24,318 per year.

Tax breaks and housing benefits per region

Some Spanish regions have personal income tax deductions to attract new inhabitants, as well as other housing benefits.  

Aragón
Aragón will help those under 35 years to buy a house in municipalities of under 3,000 inhabitants. 

Asturias
Aid will be given for the acquisition or rehabilitation of a habitual residence in areas at risk of depopulation. It will be applicable to those under 35 years of age, large families or single parents.

Castilla y León
Aid will be granted to those under 36 years of age for the purchase of a home in municipalities with less than 10,000 inhabitants, or 3,000 if it is located at a maximum distance of 30 kilometres from a provincial capital.

The region will also offer aid of up €10,000 self-employed people who move to a rural village in underpopulated areas, taking their economic activity or business with them. The place where you move to and your age, as well as your business will affect how much you get. 

Madrid
This region offers discounts of up to €1,000 for personal income tax for those under 35 years of age who live in municipalities with less than 2,500 inhabitants. There’s also a 10 percent discount on personal income tax for those who buy or restore homes in these municipalities.

Castilla-La Mancha
A 15 percent bonus will be given for buying or renovating a home in municipalities with less than 5,000 inhabitants.

Murcia
The region offers a 15 percent deduction for the purchase or renovation of a primary residence in rural areas, with a limit of €9,040. A 20 percent deduction is also given for renting a primary residence in rural areas, with a limit of €700; and a deduction of €1,000 is given for starting an economic activity as a self-employed worker or as an employee in rural areas.

Galicia
This region offers a personal income tax deduction of 10 percent of the amount paid for the purchase or renovation of a habitual residence in municipalities with less than 3,000 inhabitants. This deduction has a limit of €400 per taxpayer and applies to those under 36, large families or people with disabilities.

La Rioja
Bonuses will be applied for the purchase, construction or rehabilitation of primary residences in small municipalities.

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BARCELONA

Can Barcelona really ban all Airbnbs?

Barcelona’s mayor recently announced plans to get rid of all tourist flats in the next four years as a means of controlling rent hikes. It’s the most drastic measure so far in Spanish cities’ battle against Airbnb - but will it actually happen?

Published: 4 July 2024 15:48 CEST
Can Barcelona really ban all Airbnbs?

In late June, Barcelona mayor Jaume Collboni made national headlines when he announced plans to revoke the licence of more than 10,000 tourist apartments in the Catalan capital. 

It would “be like building 10,000 new homes,” Collboni argued, alluding to Spain’s need to build huge amounts of social housing to counteract the shortage and price rise of regular long-term rentals for locals. 

Tourism’s impact on Barcelona and the subsequent animosity from residents has been around for over a decade, whereas in other places where anti-mass tourism protests have been held, such as Málaga and Canary Islands, it’s a more recent phenomenon. 

READ ALSO: ‘It kills the city’ – Barcelona’s youth protest against mass tourism

So it’s perhaps no surprise that the Catalan city is the first place in the country to truly aim at cutting out tourist apartments altogether. 

Spain’s Housing Minister Isabel Rodríguez has lauded Collboni’s “bravery” in the fight against the proliferation of tourism lets (up by 60,000 new Airbnb-style beds in just a year in Spain). 

However, there are plenty of voices which oppose the move to make Barcelona holiday let free.

“It’s unconstitutional,” Marian Muro, president of Barcelona Association of Tourist Apartments, told business daily Expansión.

“What Barcelona City Council is doing is expropriating the rights of the holders of tourist licences,” she claimed. 

Apartur is planning legal action against the measure on three levels: through the Constitutional Court, the administrative court and the Court of Justice of the European Union (CJEU).

According to Muro, Collboni knows that the legislation he’s promised will be “revoked”, and criticises that “no analysis or study has been provided” to justify the move. 

Her association has also told the Spanish press that Barcelona stands to lose “up to 40 percent of its tourists” with said blanket ban.

Collboni’s right-hand man Jordi Valls, in charge of economy and tourism at the city council, has openly admitted that “it’s clear that there will be a legal battle”, adding that “sectors linked to tourist flats appeal to compromise but also threaten legal battles”.

“Amsterdam and New York are doing it, all cities impacted by tourism are trying to get residential harmony to exist again,” Valls told national radio RNE. 

The key for him is to strike a balance between housing being a “financial asset” and serving a “social function”.

“We can’t give up on controlling it,” Valls concluded.

Crucially, the Barcelona councillor has said that since the tourist apartment ban was announced on June 21st, the sale of flats with tourist rental licences has fallen, something also reported in Catalan daily El Periódico, which stated that such sought-after properties were selling for €100,000 above the standard appraisal. 

For economics professor at Barcelona University Gonzalo Bernardos, tourist flats don’t represent enough of Spain’s housing market for a ban to have a sufficient impact.

“Eighty percent of tourist flats in Catalonia are owned by people with just that flat”, Bernardos claimed on La Sexta, so the ban would not have a great impact on “large investment funds or people who want to speculate” with property prices.

READ ALSO: VUT, AT or VV? Why Spain’s holiday let categories matter to owners

Barcelona’s progressive revocation of tourist let licences until 2028 may be endorsed by local and national authorities currently, but it will be a struggle for them to win the many legal battles they are set to face in the coming years from groups with financial interests in the Airbnb market.

Last year, the European Parliament approved new data-sharing rules that clamp down on illegal short-term rentals, as a means of protecting residents of European cities who face shortages of affordable housing.

However, EU lawmakers have not yet considered a blanket ban on Airbnb. 

The EU Charter of Fundamental Rights does state that “The use of property may be regulated by law in so far as is necessary for the general interest”, but completely eliminating the right of Spaniards and Europeans to let out their homes to tourists will be a monumental task. 

READ ALSO: Good tourists, bad tourist – How to travel responsibly in Spain

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