Housing Law to Raise Taxes on Large Landholders

Canary Islands socialists propose eliminating the property transfer tax (ITP) for homes under €200,000 and imposing a special levy of 20% on large holders and vacation homes. They note that more than 81,632 properties are owned by large holders.

The Socialist group in the Parliament of the Canary Islands has unveiled details of a proposed Housing Law aimed at promoting the right to housing. The bill includes a “fiscal rebalancing” that would:

• Abolish the property transfer tax (ITP) for dwellings priced below €200,000.
• Create a register of large holders.
• Introduce progressive ITP brackets of 10 %–13 % based on property value, resulting in an effective rate lower than the current 6.5 % for homes up to €550,000.
• Apply a flat 20 % special levy on large holders and vacation homes, regardless of price, for properties above €550,000.

Manuel Hernández Cerezo presented the Housing Law in Parliament.

“No one can pay the same as someone buying their first home as someone acquiring fifty to speculate.”
Manuel Hernández

The PSOE also denounced the “silent exit” of families from their neighborhoods, linking it to an 80 % increase in the register of vacation homes—from 40,236 units in 2023 to 72,449 in 2025.

More Homes Leave the Market Than Built in 40 Years

According to spokesperson Sebastián Franquis:

• 81,632 properties are in the hands of large holders.
• 77,000 are owned by companies.
• Four individuals control 620 homes.

“More than 32,000 homes have left the residential market for vacation use due to the government’s policy and the lack of a moratorium. That figure equals all public housing built in the Canary Islands over the past 40 years,” he said, adding that two recent housing decrees have worsened the situation.

39 % and 21 % Increases in Sale and Rental Prices

Franquis highlighted that, from May 2023 to September 2025, sale prices rose 39 % per square meter and rental prices increased 21 %, a sharper climb than the 2019‑2023 period.

• 55 % of gross salary is spent on housing in the Canary Islands, versus the national average of 47 %.
• Large holders account for 8.2 % of the market—double the national average of about 4 %.

He noted that the application of the national housing law has produced positive effects in regions such as Catalonia, Galicia, Navarre, and the Basque Country, curbing price hikes.

Stopping Speculation and Public‑Housing Deficit

The PSOE argues that speculation must be halted. It criticizes the current government for building only one public home under the previous administration’s housing plan, in which Franquis served as Minister of Public Works and Housing.

“By the end of the legislature, Clavijo will be the president who has spent the most time in front of the community and has not promoted the construction of a single public house,” the spokesperson warned, urging that the Canary Islands not become a tax haven for vulture funds buying large amounts of housing.

The party also proposes regulating pre‑emptive and retractable rights for the autonomous community, especially for sales involving legal entities that own more than ten homes.

Why Didn’t the “Flowers Pact” Promote This Measure?

In a communiqué, the socialists demanded that the coalition government (Coalición Canaria and Partido Popular) once and for all regulate the rental market, curb speculation, and boost public‑housing construction.

“When this government has had to choose, it has chosen the powerful. We choose the people,” said Franquis.

When asked by EFE why the measures were not pursued despite a parliamentary majority, Franquis replied that comparing periods is difficult and that the current legislature faces a different context.

“We emerged from a pandemic that dominated 70 % of the legislature and had zero tourism. The priority was to revive the economy and tourism,” he explained, noting that the Canary Islands are now experiencing an economic boom.

Tax Reduction According to Property Value

Manuel Hernández Cerezo illustrated the proposal with a €2 million building that would see its tax liability rise from €130,000 to €400,000 under the new regime.

“There are cases where a person buying a home to rent on a platform pays 6.5 % tax, and someone buying for personal use also pays 6.5 %,” Hernández complained. “Those who buy to exploit tourism will now pay 20 % under the socialist proposal.”

The PSOE also suggested:

• 100 % exemption of the tax on documented legal acts for people under 40.
• Additional tax benefits for victims of gender‑based violence.

These measures are projected to increase revenue by €46 million, which, by law, should be earmarked to strengthen the funds of the Canary Islands Housing Institute.

Register of Large Holders

The proposed Register of Large Holders would enable the government to identify precisely who controls the housing market, how many properties they own, and where they are located.

“There is no real control of that information, and without data there can’t be an effective housing policy,” emphasized Hernández.

Government’s Pre‑Emption Right to Purchase Homes

The second tool involves pre‑emptive and retractable rights, allowing the Canary executive to acquire homes on sale from large holders before they enter speculative hands. Acquired properties would be added to the public housing stock—autonomous, island, or municipal—and allocated for affordable rentals.

According to PSOE estimates, this could increase the public housing stock by 30 %.