In southern Gran Canaria, the Property Tax (IBI) is not just a tax; it's the lifeblood of a municipal budget fueled by the construction boom. Vox's proposal to apply discounts of up to 95% to properties linked to economic activities declared to be of "special interest" or "job creation" has sparked a debate about the sustainability of this model in an area where the net revenue from the IBI already generates €26,3 million annually.
Santiago Abascal's right-wing party, Vox, has launched an initiative to offer a discount of up to 95% on the full amount of the Property Tax (IBI) for properties where economic activities are carried out that are declared to be of special municipal interest or utility due to social, cultural, historical, artistic, or employment-generating circumstances that justify such a declaration. The party argues that reducing the tax burden "is essential in a city where private economic activity is rapidly declining."
For a municipality that manages an urban tax base of €5.017 billion under a 0,57% tax rate, the measure poses a serious challenge to the viability of public revenue. While the political party argues that reducing the tax burden is "essential" to revitalize a "languishing" private sector, the technical data from the south paints a different picture: a real estate boom managed by 348 companies in the sector that prioritize rentals and hospitality over any other development.
The municipality's tax structure reveals an almost complete dependence on tourism. With 66.188 urban property tax bills, the impact of a massive tax break on commercial properties could disrupt the balance of services within a highly specialized business sector. Currently, the local economy caters to the immediate needs of visitors, with 1.558 retail establishments dominated by tobacconists (122) and clothing stores (330), compared to a negligible presence of traditional businesses such as fishmongers (2) or butchers (9).
The inherent risk in the proposal is that a subsidy designed to "promote employment" could end up benefiting an already established service sector that barely needs incentives to survive, while draining the resources needed to maintain the infrastructure that these same businesses consume. In the south, rural land is now a nostalgic anecdote, generating €112.362 in revenue; the real capital lies in the intensive use of the tourist zone.
The proposed legislation argues that reducing property tax (IBI) is a more agile tool than subsidies for improving competitiveness. However, in an ecosystem with a banking penetration rate of only 4 branches per 10.000 inhabitants and a technical management system focused on efficient rentals, the question for local authorities is whether the City Council can afford to forgo its main source of liquidity.
Applying a 95% tax break to properties of "special interest" in Meloneras or Playa del Inglés could create a multi-million euro hole in public coffers. For a municipality that must balance street cleaning, pedestrian visibility, and epidemiological surveillance in a high-traffic tourist area, Vox's proposal appears to be a supply-side economics experiment in an environment that, for now, operates at full capacity under the current tax system.
