The government vetoes the return of the mortgage deduction and the reduction of VAT on housing

The government used its veto power to block thirteen amendments presented by opposition groups in the Senate on the bill on the right to housing, which is in the final stage of processing in the Upper House, with the aim of the rule being approved and entering into force before the municipal elections 28. In particular, the executive branch resorted to the power granted to it by the Constitution to reject any parliamentary proposal or amendment “which implies an increase in loans or reduction of budget revenue”, in which case the Government must give consent to start processing it.

Amendments to the future law that are rejected by the Executive Power correspond in most cases to measures to relieve the fiscal burden on families, from refund of the deduction for the purchase of a home until the reduction of VAT in all the necessary elements for the construction of protection apartments or social rent.

In particular, in one of the vetoed amendments, a popular group in the Senate claimed to restore home purchase deductionalthough limited to only 18-35 year olds, who would be able to deduct 25% of the interest paid on the profit and loss account under this proposal in a mortgage for the acquisition of a permanent residence, with a maximum of 1,000 euros per year. PP is also advocating the return of the rent deduction, with a maximum of 1,200 euros per year for tenants of the same age (or up to 40 years if they have dependent family members or are unemployed).

Another proposal shared by several political groups, which has been rejected by the executive, is to improve the deduction that landlords can make in IRPF for the income generated from their rentals. Therefore, Ciudadanos Senator Miguel Sánchez proposed raising up to 95% of the rent deduction if the person renting the house is a public administration or a non-profit person, i.e. 80% if the tenants are not older than 35 years.

Buying a house with 4%

Another of the most frequently repeated tax proposals of opposition groups is the reduction of rates VAT on the purchase of housing or intermediary transactions for their construction. Thus, Vox’s amendments propose reducing the tax for the purchase of the first home to 4% (compared to the 10% currently applied to the acquisition of new properties), while Junts and Geroa Bai advocate setting the same super-reduced rate for the purchase and sale of land in which build an apartment for protection or for social rent, as well as for contracts on the creation of construction projects and the management of works or their execution. But again, all these proposals clashed with Article 134.6. of the Constitution, which gives the Government the right to veto when amendments could mean a decrease in budget revenues.

Outside the fiscal area, the executive also refuses to discuss Más Madrid senator Pablo Gómez Perpinyà’s claim to expand ban on the sale of public housing stockalready foreseen by the deletion of the law, prevent taxpayers’ money from financing the construction of apartments that will be sold.

PP accepts highlighted areas, but with a different name and without paying attention to prices

Despite the PP’s opposition to the regulation of stressed areas introduced by the future housing law (even in front of the autonomous communities governed by the peoples who will not apply this new figure in order not to establish rent price control), one of the amendments presented by the popular group in the Senate agrees to include this concept, although renaming it “areas of high housing demand”. Contrary to what is foreseen in the draft law, the Narodniks associate his statement with “that the available supply of apartments, both for purchase and for rent, in the last five years has not experienced a growth commensurate with the growth of the population” and not with the development of prices. In fact, in its proposal PP clarifies that under no circumstances would it interfere with rental income.