Benefits for large families when buying a home in Spain

Buying a home is a significant step for any family, but it can be particularly challenging for large families. To help ease this process, Spain has implemented a variety of financial aid programs aimed specifically at supporting families with multiple children. These measures are designed to reduce the financial strain and make homeownership more accessible. If you're exploring the property market, this article will outline some of the key benefits available to large families in Spain.

What is considered a large family in Spain?

In Spain, a large family is typically defined as one or two parents with three or more children, regardless of whether they share the same biological parents. However, under the new Family Act of 2024, additional family situations are also recognized as large families:

1. Families with two children where one child or one of the parents has a disability of 33% or more.
2. Single-parent families with two children. In cases of separation or divorce, both parents can obtain large family status.
3. A parent with two or more children when the other parent is deceased.

Other cases related to orphanhood are also covered by the law. For more details, you can refer to the 2003 Law on the Protection of Large Families until the new law is published in 2024.

The above-mentioned families are classified as general large families. There are also special large families, which include those with four or more children or those who meet specific additional requirements. These families are eligible for higher percentages of the allowances detailed below.

1. Reduced tax on capital transfers and on documented legal acts

The taxes on capital transfers (Impuesto de Transmisiones Patrimoniales – ITP) and on documented legal acts (Impuesto de Actos Jurídicos Documentados – AJD) are two key taxes when buying or selling property. The ITP typically represents the largest portion of costs when purchasing a second-hand home. Therefore, qualifying for reduced tax rates can significantly lower the amount payable at the time of purchase.

Reduced ITP

Large families can benefit from a reduction in the ITP tax rate when purchasing property in Spain. This reduction varies depending on the autonomous community, so it’s important to check the specific percentage and requirements on the website of each community. Here are some examples:

• In the Valencian Community, eligible large families can benefit from a reduced tax rate of 3% or 4%, depending on the property's price. Both rates represent significant savings, as the general ITP rate in the Valencian Community is 10%. For instance, on a property valued at €200,000, large families would pay €8,000 instead of €20,000. As you can see, the difference is substantial.
• In Andalusia, large families qualify for a reduced rate of 3.5% if the property does not exceed €250,000.
• In the Region of Murcia, the tax rate for large families is reduced from 8% to 3% if certain requirements are met, such as the property being the family's main residence.

Reduced AJD

Although this tax does not represent a significant cost (ranging between 0.5% and 1.5% of the property's value), there are also reductions for large families. For example, in Andalusia, the AJD is reduced to 0.1% for large families purchasing a property valued at under €250,000.

2. Reduced tax on the ownership of real property

The tax on the ownership of real property (Impuesto sobre Bienes Inmuebles – IBI) is a tax levied on all property owners in Spain. It is paid annually, and the amount varies depending on each municipality and the cadastral value of the property, ranging between 0.4% and 1.3%.

Many localities offer IBI rebates for large families. These discounts can range from 20% to 90%, depending on the municipality and the cadastral value of the property. Here are the reductions for some cities as a guide:

• In Valencia, the annual rebate for large families is 60%, regardless of the cadastral value of the property. Special large families receive a 90% rebate.
• Madridoffers a 90 % rebate up to a cadastral value of up to 205,000 euros.
• In Barcelona, the rebate percentage ranges from 5% to 90%, depending on the household income and on the type of large family.

3. Aid for the purchase or rental of housing

• Subsidies and grants: There are assistance programs for the purchase or rental of housing for large families, which may include subsidies or low-interest loans. For example, in Andalusia, large families that meet certain financial requirements can access a reduction of €50 in the loan instalment for every €10,000 of the loan.
• Subsidized housing: Large families typically have priority access to subsidized housing (viviendas de protección oficial - VPO) or social housing, which are more affordable. To access these dwellings, certain requirements must be met, varying by autonomous community. For example, large families may have access to larger dwellings.

4. Other benefits

• Personal income tax deductions: Large families can benefit from specific deductions in the income tax return (IRPF). In Spain, the deduction can be up to €1,200 per year and may be increased if a family member has a disability. In some regions, such as the Region of Murcia, large families can also deduct a percentage of the amount spent on the purchase of their main residence.
• Municipal allowances: In addition to national allowances, many autonomous communities and municipalities have specific support programmes for large families, which may include subsidies, discounts, and other forms of assistance. You can use this search engine for benefits for large families to find all available aid at state, autonomous community, and municipal levels.
• Education: There are numerous grants and scholarships available for education, including those for tuition fees, canteen costs, and transport.
• Public transport: There are significant discounts on public transport, both locally and nationally, facilitating the mobility of the family.
• Leisure and cultural services: Large families can also benefit from reductions on admission fees to museums, theatres, theme parks, and other cultural and leisure services.

How to apply for the Large Family Certificate in Spain

To obtain the Large Family Certificate, you will need to apply in the Autonomous Community where you reside. This process can be completed at the social services or family offices in your autonomous community.

Documentation required to apply for the Large Family Certificate:

• Application form: This form is usually available online or at the relevant offices and is specific to each autonomous community.
• National identity documents of all family members.
• Family register or equivalent documents proving the relationship between family members.
• Certificate of census registration for all family members.
• In case of disability, official certificate accrediting the degree of disability.
• Additional documents: The Autonomous Community may require other documents, such as certificates of studies for children of legal age who are still studying.

It is important to check the specific requirements and documents needed for your Autonomous Community.

Can foreigners qualify for the advantages granted to large families?

Yes, foreigners can benefit from the advantages and subsidies available to large families in Spain, as long as they meet the established requirements. All members of the family must be legal residents in Spain. This implies having a valid residence permit.

As you can see, Spain offers various options to facilitate home purchases for large families. To calculate your available budget, it’s crucial to consider not only these benefits but also the additional expenses you will face when buying a home. Once you have everything in order, we encourage you to start searching for your new home, bringing you one step closer to finding the perfect place for your family!