In the midst of the housing affordability crisis, real estate developers have proposed a series of measures aimed at alleviating the pressure on the market. Among their proposals are tax adjustments, simplification of procedures, greater public-private cooperation, activation of land for construction and access to more financing.
In the tax area, APCEspaña suggests applying a reduced VAT of 4% on the sale of affordable housing for young people. They also propose reviewing the taxation of entities under the leasehold regime and reconsidering VAT for below-market-rate housing.
In terms of administrative procedures, they request the modification of the ECO Order to speed up the obtaining of licenses and allow the review of projects by external experts. In addition, they propose to promote the industrialization of construction to combat the shortage of skilled labor and speed up execution times.
During his speech, Xavier Vilajoana, president of APCEspaña, urged the activation of the 4 billion euro financing line of the Official Credit Institute (ICO) together with the government to promote the construction of affordable rental housing. He also proposed enabling more credit lines, including in collaboration with the European Investment Bank (EIB).
Vilajoana also stressed the urgent need to reach a consensus on and adequately finance a Housing Plan that encompasses various types of promotion and guarantees legal certainty to attract private investment. “We propose a reduced VAT for buyers under 35 years of age,” he explained, emphasizing that this group faces great difficulties in gathering the necessary savings to purchase a home.
The president denounced the “serious imbalance” between housing supply and demand in Spain, which means that households spend 40% of their income on renting, compared to 20% in the euro zone average. According to Vilajoana, “it is necessary to almost triple the current construction, but recent policies are going in the opposite direction to this objective”.
In this context, developers are calling for a reform of the Land Law to facilitate the generation of land for development. They also propose to mobilize public land and allocate it to both public and private developers, in addition to implementing measures to allow changes of use in vacant plots of land to enable the construction of housing.