Spain

Overview

Spain levies no land value tax. Its recurrent tax on real property, the Impuesto sobre Bienes Inmuebles (IBI), is a municipal tax on cadastral values that, by statute, separate the value of land from the value of buildings, so a land-only base exists on paper. In practice the cadastral base is revised infrequently and unevenly, the tax raises less than 1% of GDP, and the question of who gains from the gap between assessed and market values is only now being studied. Around that modern core sits a long Spanish thread: an early twentieth-century Georgist popularizer, Julio Senador Gómez; a century-long wealth history in which land, agricultural then urban, dominates national wealth (Blanco, Bauluz & Martínez-Toledano); the Valencian "land grab" law of 1994, a value-capture scheme that became a byword for how not to do it (LRAU); and a 2025 simulation of a land value tax for the fiscally autonomous province of Bizkaia (Olea, Hoyos & García Enríquez).

The IBI and the Cadastral Base

The cadastral value of every property is set by the Dirección General del Catastro from the data in the cadastre and is, by law, the sum of a land value and a construction value.[1] The statutory criteria include the property's location and planning circumstances, the cost of the buildings and their age and quality, and "the circumstances and values of the market"; the cadastral value may not exceed market value, defined as the most probable price between independent parties, and a ministerial order fixes a market-reference coefficient for each class of property to keep it below that ceiling.[1] The IBI's taxable base is the cadastral value.[2] Municipalities set the rate within a national band: for urban property the minimum and default rate is 0.4% and the maximum 1.10%, with the band for rural property running from 0.3% to 0.90% and surcharges available to provincial capitals and other categories of municipality; the same article allows a surcharge on permanently unoccupied residential property and on tourist accommodation.[2] When a general revaluation raises cadastral values, the increase is phased in through a reduction in the taxable base that runs for nine years (arts. 67–68 of the local-finance law), which, together with the long intervals between revaluations, is why assessed values lag behind market prices and lag unevenly across municipalities.[2]

Revenue in Comparative Terms

According to the OECD's Revenue Statistics, Spain's recurrent taxes on immovable property raised 0.89% of GDP in 2024, down from 1.08% in 2019 as the economy outgrew a base that is revised slowly and 99.8% of it accrues to municipalities.[3] That places Spain well below the United Kingdom (2.80%), the United States (2.67%), Canada (2.64%) and France (1.95%), but above Germany (0.37%) and Estonia (0.15%), whose land-only tax is the one European recurrent property tax levied on land alone.[3]

Who Bears the Tax: The Under-assessment Question

Because the IBI falls on registered cadastral values "revised infrequently and at uneven intervals," the effective base departs from market value "in ways that are neither uniform nor neutral across households," as a 2026 working paper by Alex Fernandez and Ricardo Duque-Calvache (University of Granada) and Rowan Arundel (University of Amsterdam) puts it. Drawing explicitly on Henry George's concept of land rent, the authors test for vertical inequity in the cadastral base across urban Spain using household-level registry data, then use a microsimulation to estimate the capitalised value of the resulting tax saving and trace its distribution across housing wealth, income, age and location, alongside a stylised scheme for recycling the revenue through income tax. Their simulations "suggest that reorienting taxation towards property and away from labour has the potential to improve progressivity and reduce disparities in housing wealth."[4] The paper is unpublished and its abstract reports no estimates, so neither the direction nor the size of the inequity it finds can yet be stated here; what it establishes is that the Spanish case is being examined with the same question that the Ecuadorian capitalization study asks, namely whether under-assessment of the fastest- appreciating locations shifts the burden of a property tax onto slower-growth areas (Tubío-Sánchez & Reyes-Bueno).

The Georgist Thread

The modern debate has deep roots. Senador Gómez fused Henry George's land-tax argument with Spain's regeneracionista renewal movement in the first third of the twentieth century rather than importing it unmodified. Blanco, Bauluz and Martínez-Toledano's reconstruction of Spanish national wealth from 1900 to 2014 finds land dominant throughout, agricultural land early and urban land later, with housing capital gains driving 45% of real wealth growth from 1950 to 2010. Valencia's 1994 LRAU let developers have land reclassified without the owner's consent and then charged owners for infrastructure, a badly designed capture of land value that dispossessed thousands. The Bizkaia study finds that a proportional 1.05% land value tax, estimated parcel by parcel with a spatial hedonic model, would raise enough to displace the province's existing real-estate taxes and cut income tax for roughly the bottom three-quarters of the population. Spain's subnational net wealth tax, by contrast, raised only 44.6% of its theoretical maximum in 2014, with the richest tenth of taxpayers accounting for three-quarters of the gap (SWAY review).[5]

See Also

• Julio Senador Gómez — Spain's leading early-20th-century Georgist popularizer
• Blanco, Bauluz & Martínez-Toledano: Wealth in Spain, 1900–2014 — a country of two lands
• Valencia "Land Grab" Law (LRAU, 1994) — value capture done badly
• Olea, Hoyos & García Enríquez: A Land Value Tax for Bizkaia — the simulated reform
• Mass Appraisal Methods · International Mass-Appraisal Cases — including a Valencian industrial-land valuation study
• Tubío-Sánchez & Reyes-Bueno: Loja, Ecuador — under-assessment and who bears a land tax
• Tax Capitalization · Land Value Tax · Land Value Capture
• United Kingdom · Germany · Estonia · Denmark — European comparators

Sources

1. Spain, Real Decreto Legislativo 1/2004, de 5 de marzo, Texto Refundido de la Ley del Catastro Inmobiliario, arts. 22–23. boe.es — used for the land-plus-construction definition of cadastral value, the valuation criteria and the market-value ceiling with its ministerial reference coefficient (A-claim; consolidated statute).
2. Spain, Real Decreto Legislativo 2/2004, de 5 de marzo, Texto Refundido de la Ley Reguladora de las Haciendas Locales, arts. 61, 65, 67–68 and 72. boe.es — used for the IBI's taxable base, the rate bands and surcharges, and the phased reduction after revaluation (A-claim; consolidated statute).
3. OECD, Revenue Statistics (Global Revenue Statistics Database), category 4100 "Recurrent taxes on immovable property" as a percentage of GDP, 2019–2024. OECD Data Explorer — used for the Spanish, British, American, Canadian, French, German and Estonian figures and the sector split (A-claim for the published series; 2024 values are the latest and may be provisional; retrieved from the OECD SDMX service 2026-10-08).
4. Alex Fernandez, Rowan Arundel & Ricardo Duque-Calvache (2026), "Who Benefits from Property Undertaxation? Housing Values and Tax Inequity in Urban Spain," SSRN working paper 7417258, DOI 10.2139/ssrn.7417258. doi.org — used for the paper's framing, method and simulation headline as stated in its abstract (B-claim; working paper, not peer-reviewed; abstract only consulted, the text being behind SSRN's access wall; Arundel is a University of Amsterdam housing geographer with a peer-reviewed record, so Tier 1 for the authors' own argument).
5. The Senador Gómez, Blanco et al., LRAU, Bizkaia and SWAY findings are carried on their own pages, cited there: Julio Senador Gómez, Blanco, Bauluz & Martínez-Toledano, Valencia Land Grab Law, Olea, Hoyos & García Enríquez and the SWAY review — used for the summary paragraph above.