Spain’s punishing property taxes drag it down in global rankings

A recent report from the Tax Foundation highlights how Spain’s tax system is becoming increasingly uncompetitive, particularly for property owners. With one of the highest property tax burdens in the OECD, Spain is driving away investment and stifling economic growth.

Spain’s tax burden: a barrier to growth

In a blog article commenting on the Tax Foundation’s latest report and international ranking, Cristina Enache of the Tax Foundation, a tax research and advocacy outfit, explains how Spain’s tax policy is holding back economic growth and making the country poorer. “Spain’s poorly designed tax policy hurts its competitiveness,” is the title of the article, which points out that both the central government and regional governments share responsibility for the decline. Spain has suffered from “multiple tax hikes, new taxes, and weak performances in all key tax efficiency metrics” over the past five years.

While Spain ranks mid-table for VAT and individual income taxes, its real failure is in property taxation. The country imposes a wide range of levies on property owners, including:

  • A tax on real property

  • A property transfer tax

  • Capital duties

  • A financial transaction tax

  • A net wealth tax

  • An inheritance tax

  • A gift tax

This extensive web of taxes creates distortions in the property market, discourages investment, and makes Spain one of the least competitive countries in the OECD, especially when it comes to property taxation. It should be said that the United Kingdom doesn’t rank much better, in 30th place overall, and 34th for property taxes.

Full article: https://www.spanishpropertyinsight.com/2025/03/09/punishing-property-taxes-drag-spain-down/?utm_source=mailpoet&utm_medium=email&utm_source_platform=mailpoet&utm_campaign=2025-03-09

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