The year 2019 will begin with good news for the citizens whose emoluments depend on the Official State Bulletin. The workers who receive the minimum wage, the pensioners and officials will see their purchasing power increase significantly thanks to decrees approved by the Government of Pedro Sánchez. But for the majority of wage earners that are part of the waning middle class, the new year will mean more tax pressure and price increases and fees for essential services such as electricity, fuel or telecommunications.
The large macroeconomic figures will continue to be positive although the deceleration is appreciated. It is estimated that the economy closed 2018 with a growth of 2.6% andand decelerate to 2.2% in 2019, according to the forecasts of the Bank of Spain.
But salaries, at least in private companies, as already happened in this year that closes, will not notice in excess those favorable winds, and the price rises will make them lose purchasing power, since inflation is expected to grow by 1 , 6% in the year as a whole (in accordance with the estimates of the Bank of Spain), although the Government lowers this increase to 1%.
Employers CEOE and Cepyme and unions CC OO and UGT signed last summer the IV Agreement for Employment and Collective Bargaining by which they committed themselves in 2019 to transfer to sectoral agreements a wage increase of around 2%, plus a variable 1%. But that document does not obligate and, therefore, each company will negotiate salaries with its employees on its own.
Fortunately for those who earn less, the Government of Pedro Sanchez has approved a minimum wage increase of 22.3%, up to 900 euros per month, which must be applied by all companies. The long-term unemployed also breathe with relief, because the extraordinary subsidy for unemployment is maintained until they develop a new model of assistance to the unemployed.
They are also in luck officials, whose salaries rise by 2.25% thanks to the agreement signed by the former Executive of Mariano Rajoy. Although the most fortunate in this election year are again the 10.3 million pensioners. Those who receive contributory pensions (9.7 million) will see their salaries rise by 1.6% while the minimum and non-contributory pensions rise 3%. Thus, the amount of the minimum pension for retirees of 65 years with dependent spouse will be 835.8 euros per month and the maximum pension at 2,659.4 euros per month, 18 and 41 euros per month, respectively. In addition, all of them will receive a compensatory payment of 0.1% that will be paid before April for the deviation of inflation in 2018.
The self-employed will have to scratch their pocket. Its minimum contribution base is increased by 1.25% from January 1, 2019, to 944.35 euros per month, and the rate of contribution will be 30%, which means that self-employed individuals will have to pay 5.36 euros more per month (64 euros more per year) than what they currently pay, although in return they will receive greater protection.
Transportation and fuels
In general, public transport (buses and metro) does not experience large increases in large cities and freezes in Madrid, Barcelona and Valencia. What they do raise are taxis. In Madrid, the flag drop will be 10 cents more expensive in daytime and 20 cents at night and holidays up to 2.5 and 3.10 euros, respectively. The cost of the kilometer also rises 5 cents to 1.10 euros. Overall, it is an average increase of 5%. Those of Barcelona will increase 2.6%, as they did in 2018. These increases can also drag Rental vehicles with driver (VTC): Platforms such as Uber or Cabify could take advantage of it and update their prices upwards, although municipalities such as Madrid or Barcelona want to even restrict their activity to meet the demands of taxi drivers, which will be to the detriment of the consumer.
Renfe will keep frozen in 2019 for the fourth consecutive year the Cercanías ticket price, although with the new year will raise single tickets and roundtrip 3.5% for the Media Distance services (regional) and 7% for the Avant services (the regional ones that use the AVE tracks). For AVE and Long Distance trains, both services liberalized, the price of the ticket will not rise with the change of the year, although the operator could change it later in the year.
In terms of air transport, airport charges are frozen, which can compensate for the foreseeable rise in fuel compared to just over 50 dollars in which at the end of this year the barrel of Brent crude is quoted.
The motorists will have it worse. In addition to the evolution of fuels and the possible rebound of the dollar against the euro that influences the cost of raw materials, on January 1 comes into effect the repeal of the regional rate of the special tax on hydrocarbons, now in the hands of the communities autonomous and that can range between 0 and 48 euros. Its integration in the state type will cause a rise in gasoline and diesel in those autonomous communities with lower rates. The tax rises 4.8 cents per liter in the Basque Country, Cantabria, Castilla y León, La Rioja and Navarra; 3.1 cents per liter in Madrid; 2.4 cents in Aragón; 1 cent in Extremadura; and 0.8 cents in Asturias.
Fill the deposit can be raised even more if finally the partial equalization of the tax that applies to diesel and gasoline goes ahead, which would mean an additional diesel increase of 3.4 cents per liter, as reflected in the plan budget referred to Brussels.
For users of toll roads, drivers must face an average increase of 1.67% from January 1 for the entire state network. However, since January 15, the nine motorways that have been rescued by the State, including Madrid's radios, will register an average reduction of the rates of 30% and will be free at night (between midnight and 06: 00 hours).
Gas and light
The Last Resort Rate (TUR) of natural gas will be reduced by an average of 4.6% as of January 1, compared to the last quarter of the year. Those that are hosted by TUR 1, mainly customers that use gas for the supply of hot water and cooking and whose consumption does not exceed 5,000 kilowatt hours (KWh) per year, will fall by 3.8%, while TUR 2 , which employ consumers who also have gas heating (between 5,000 and 50,000 KWh per year) will do so by 4.8%.
These rates are updated every quarter. For the rest of the year, the good news is that the regulated part of the invoice (access tolls), fixed by the Government, will remain frozen in 2019, so the evolution of the bill it will depend on the price of gas in international markets.
The electricity bill, which ended 2018 with an increase of 9.26% in the megawatt hour (MWh), will also depend on the weather and the evolution of fuels, although it may rebound by more than 4% if the government reinstates the tax that charged the electricity companies for generating electricity. The increase in CO2 emission rights can also trigger the bill.
Fortunately for consumers, the main basic supply, water, is frozen at least in Madrid and Barcelona.
Telephony, Internet and medicines
The telephony and Internet bill goes up for the third year in a row for many families. Telefonica has given the shot when announcing a new increase of 5 euros per month in its old Fusion packages from February. Before, in January, will increase 5 euros for fiber-optic services, mobile rates # 15 and # 25, which rise 5 euros, while those of # 1.5, # 4 and # 8 increase their price by two euros . The operator will apply other boosts to auxiliary services such as the answering machine. The rise of Movistar can drag the other three major operators (Vodafone, Orange and MásMóvil) to follow in their footsteps and upgrade their tariff plans upwards.
On January 1, the price of 1,200 drugs will be lowered, including ibuprofen, asthma drugs, antidepressants such as escitalopram, oral contraceptives such as levonorgestrel / ethinylestradiol or medicines for Parkinson's such as ropinirole.
As for investments, savers will continue to lose money if they keep it in fixed income, with interests close to zero or even negative. In the roulette of equities, the Stock Exchange is at its worst since 2010.
The bulk of taxes remains the same this year, waiting for the government to obtain the support to approve the measures announced, focusing mainly on companies and high incomes. "To be able to raise or lower taxes in the Budgets the law of the tribute itself must contemplate that possibility. And you can not create a tax in the Budgets, but it requires a specific law that is not a decree, "explains the prosecutor Francisco Javier Martín.
This means that, if the Budget is approved and if there are no changes during the negotiations, the Government will be able to introduce in them the increase of the IRPF for the high incomes with two new sections. In the first, between 130,000 and 300,000, the rate will rise from 45% to 47%. In the second, from 300,000 euros, the rate will rise to 49%. Does that mean that the State will keep half of what they charge? No, those rates of 47% and 49% will only apply to what taxpayers earn above 130,000 euros and 300,000 euros, respectively.
In the Budgets, the Executive will be able to modify the base of the saving so that they tax four percentage points more until 27% the rents superiors to 140,000 Euros. And the estate tax, which is planned to go up by one percentage point to 3.5% for fortunes above 10 million euros.
In addition, it would include the partial equating of diesel with gasoline leaving out the carriers. It would raise the taxation of large companies to pay more for the benefits generated outside and a mandatory minimum of 15% of the tax base. The tax would be lowered to SMEs that invoice less than 1 million euros, from 25% to 23%. The VAT on feminine hygiene products will be reduced from 10% to 4%. And that of the veterinary services, from 21% to 10%.
On the other hand, the Government wants to create two new figures, and has begun to process them as bills. One of them is the so-called Google rate, which will entail a 3% tax for digital services such as online advertising. The other is the 0.2% tax on the purchase of shares of large companies.
Although it needs to be validated in Congress, last Friday a royal decree was passed with increases in contributions, of 7% in the maximum base and of 22.3% in the minimum. Neither will the mortgage tax be paid. And maternity and paternity benefits will not have to be taxed after leaving them exempt from the Supreme Court.
Housing, rent and IBI continue to rise
With the end of November at -0.146%, the Euribor, the index to which most of the Spanish mortgages are referenced, continues to climb in its return to positive rates, since since February 2016 it is in negative territory. This rebound will translate into an increase in the mortgages that are being revised.
Those who want to buy a flat will have it worse. The prices of housing in Spain added their fifth year of consecutive growth in 2018 and the forecast of the experts of the sector is that the tendency does not break the next year, at least in the prices of sale. The calculated increase is between 3% and 4%, according to real estate consultancy CBRE, although other experts raise this forecast even more. The real estate portal Pisos.com estimates that the price will increase between 5% and 6% compared to 2018, up to an average price of between 1,750 and 1,800 euros per square meter.
For those who choose to rent, since last December 18, the new contracts have a duration of five years instead of three, and seven in the case that the owner is a company. The extensions are also extended from one to three years. But this extension does not have to translate into lower prices. In fact, many experts believe that the opposite will happen because the owners will want to shield themselves from future increases.
The taxes are pending of the hard parliamentary negotiation that the Government faces to take ahead the General Budgets of the State. Although some are already known. For fiscal year 2019, it is foreseen the application of cadastral values update coefficients to 1,179 municipalities, which according to the Government will translate into the practice in which the amount paid annually by the owners of housing, premises and land for the tax of real estate (IBI) will lower on average 1.92% as of January 1, 2019. However, municipalities are free to raise it up to 5% and reduce it by 2%.
In addition, the update of the values will rise in 728 municipalities and will decrease in 449 locations. And in any case the final invoice of this tax will depend on whether the consistories themselves also review the tax rates to reapply the catastrophe to your neighbors.