Spain introduces tax breaks to push owners of vacant homes to sell to public housing agencies

The decree aims to bring a portion of Spain's three-million vacant homes onto the market by incentivising owners to sell to public housing agencies. Sellers of properties that have been empty for two consecutive years can benefit from a full exemption on capital gains tax when the transaction value falls below a defined threshold, while higher-value sales receive a reduced exemption that tapers off as the price rises. Public bodies such as the Empresa Municipal de la Vivienda y Suelo de Madrid and the Instituto Municipal de la Vivienda y Rehabilitación de Barcelona are designated as eligible buyers.

Additionally, the government introduced a new savings-investment vehicle that lets sellers place the taxable portion of their gain into a EU-focused account, granting further tax relief if the funds remain invested for five years. The decree also clarifies that homes of seniors in severe dependency, when moved to care facilities or family homes, will be treated as primary residences for tax purposes. The law is set to be voted on in the Congress before the end of the week.