Spain, among the OECD countries that least respects private property

Spain is one of the OECD countries that least respects the right to property. The country ranks 26th out of 38 in the International Property Rights Index (IIPR), with a score 6.1% below the OECD average value and 5% below the EU average. A result motivated by the legal and political environment that surrounds the property, both material and intellectual. It only obtains good results in the analysis of property records, where it reaches the seventh best result worldwide.

This is one of the conclusions of a report published this Wednesday by the Institute of Economic Studies (IEE), the CEOE's 'think tank'. The organization, which is in charge of following and disseminating the IIDP in Spain, has warned of the "interventionism" of the Government in private property, articulated through measures such as the draft housing law or the prohibition of evictions.

Especially critical is the report with the draft of the new standard. Above all, for including rent controls, discrimination between small and large owners and the obligation that 30% of promotions be allocated to social housing. Regarding the first measure, the agency ensures that it is not only ineffective, but also "counterproductive."

The IEE considers that if controls are imposed on rental prices, the supply of housing will fall artificially, which will allow landlords to be more demanding when selecting tenants. In short, those most affected by the measure would be low incomes.

“In this way, a measure that supposedly pretends to be a temporary solution to the problem of access to rent, while the real imbalances in the market are corrected, ends up assuming, precisely, an intensification of said imbalance between supply and demand, and an aggravation of the problem. . Hence, it should not be acceptable even as a temporary solution, "says the document, which also recalls that every time this measure has been implemented (in cities such as San Francisco, New York, Boston, Stockholm, Paris or Berlin) it has failed. . In Catalonia, in fact, the recently implemented rent control would already be pushing prices up.

tax incentives

The solution to the high rental prices, according to the report, would be to provide greater legal certainty to the owners and thus partially solve the problem of illegal squatting. In addition, from the IEE they demand that the asymmetry between the legal protection of the tenant and that of the owner be reduced to encourage the offer.

Precisely to increase the 'stock' of housing, from the CEOE 'think tank' they also demand promoting social housing for rent, which in Spain is far from European parameters, and favor the development of public land, eliminating "rigidities and limitations of urban planning regulations that condition the adequate development of affordable rental housing". The institution also values ​​the establishment of tax incentives for the construction of rental housing.

Because right now property taxation is high, according to the organization. And this "reduces the effective development of property rights and negatively affects the efficient use of such resources, harming investment and savings." If the International Property Rights Index were calculated taking into account the impact of property taxes, the average OECD score would drop by 5.6%, but this decline would be more pronounced, at 7%, in the case of Spain, which shows that "it has a more damaging tax regime for property in comparative terms", according to the 'think tank'.

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