Spanish households accumulate real estate assets whose value is estimated at around 6.2 trillion euros, a staggering and difficult to conceive figure that multiplies by four the Spanish GDP recorded in 2022.. However, this wealth of wealth is far from being distributed equitably.. So much so that the 10% of the richest households in the country accumulate a third of the real estate assets, while the poorest half of the population barely owns 16% of the value of Spanish housing.
This is one of the conclusions of a new statistic presented by the Bank of Spain to measure how household wealth is distributed.. The objective of this publication is to monitor how the distribution of wealth in Spain evolves more frequently than what microeconomic indicators offer.
The “distributive accounts”—as the banking supervisor has called the statistics—also reflect that the wealthiest households have increased the portion of national wealth they own in the last 20 years.. Thus, while the 10% of the richest families in the country owned 31.2% of the total real estate assets of households in 2002, in 2022 their share had increased to 36.7%.
The opposite is true for the poorest half of the population, which previously owned 18.2% of the country's real estate wealth and now controls 15.7%.. However, it is important to highlight that since the outbreak of the pandemic, the poorest half of households have managed to regain some weight in the distribution.
Real estate assets are, by far, the asset in which the greatest amount of wealth is accumulated.. According to the latest edition of the Family Financial Survey (EFF) – corresponding to 2020 – housing and other real estate properties accounted for 69.5% of all national wealth.
The second major source of wealth for Spanish households are financial assets such as deposits, investment funds or listed shares.. Taken together, these savings and investment vehicles represent more than 21% of the country's accumulated wealth.. And in this case, the prominence of the upper classes is even greater than in real estate.
In this way, the 10% of the richest households own 40% of all the wealth accumulated in Spanish bank deposits, the savings vehicle par excellence of households.. On the opposite side of the spectrum is the poorest half of the population, whose share of the deposit pie barely reaches 14%.. In this case, the loss of weight in the distribution that the lowest wealth households have suffered is especially striking.. In 2002, the poorest half held 21.8% of the funds accumulated in household deposits, almost seven percentage points more than now.
When it comes to the distribution of wealth in listed stocks and investment funds, the wealthiest households have a virtual monopoly on these assets.. Thus, 79% of the value of the investment funds held by Spanish households is in the hands of the richest 10% of them, a percentage that rises to 86% in the case of shares of listed companies.
In this document, the Bank of Spain also analyzes the distribution of the debts accumulated by Spanish households, 84% of them in the form of mortgages for the purchase of a home.. In this case, the distribution is practically proportional: the richest 10% of households accumulate 11.4% of the real estate liabilities, while the poorest half of the population has 45%.
Should wealth be taxed?
The growing inequalities in the distribution of the country's wealth revive a debate that the regional governments have recently brought back to the fore: Should the richest also pay more taxes for their wealth? The controversy is served and the positions are clear.
The regional presidents of the Popular Party are betting on 100% discounts on the Wealth Tax in the communities they govern, which, in practice, means its elimination. In addition to Madrid and Andalusia, which have already done so since 2022, Murcia, Cantabria and the Valencian Community have joined the list (Galicia does so at 50%). Along the same lines, several popular autonomies have undertaken significant reductions in other taxes that indirectly tax wealth, such as Inheritance and Donations or Asset Transfers and Documented Legal Acts.
It is often argued to justify these tax cuts that the objective is to provide relief to families, put money back into taxpayers' pockets, or end “double taxation.”. The other side of the tax battle
The tax on large fortunes has been undeniably punctured and there are more and more communities that have suppressed or are going to suppress wealth.
For now, Madrid and Andalusia offer a 100% discount, but Murcia, Cantabria and the Valencian Community have also announced measures along the same lines.. Galicia already discounts it at 50%.
This is going to cause an increasingly greater gap in the taxation of wealth, which is true that it provides quite residual income compared to other taxes, but I think it is an interesting debate.. Especially seeing that the number of large taxpayers continues to grow.
It seems to me that this highlights the debate about how we should tax wealth.
Wealth tax is relatively rare in Europe. Only Switzerland and Norway have it as such.. However, several countries have specific taxes or surcharges for certain types of assets (especially real estate). This is the case of France, Italy, Belgium or Portugal.
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