Three different laws, including a 1979 agreement with the Vatican, exempt the Catholic Church from paying property tax in Spain. Other recognized religions and non-profit organizations like the Red Cross enjoy the same exemption, but because of the Catholic Church’s vast holdings there are many who argue that the church should not get such preferential treatment. España Laica, a pro-secularism group, estimates that the church would owe 2.5 to 3 billion euros in property taxes annually.
Now with austerity measures and a European bailout looming, the idea of the church paying property taxes is a real possibility.
“With the crisis, we all have to tighten our belts,” says David Cerdán, the Socialist Party councilman in Aspe who, together with a colleague from the United Left party, presented the motion to abolish the exemption. “Our sense of social justice, which I believe Catholicism shares, tells us that those who have the most should help those who have the least.”
In Aspe, located in the southeastern province of Alicante, the measure would only affect holdings that are not strictly devoted to religious practice or to social services. Only three of the church’s 11 properties — a storefront that houses a restaurant and the two parish priests’ homes — would be subject to the tax, which Cerdán estimates would annually bring an additional 7,000 euros into the municipal coffers.
“This doesn’t have to do with God,” Cerdán says, rejecting claims that anti-clericalism is motivating the change. “This has to do with problems on earth.”
Many Catholic schools and hospitals are subsidized by the State and each year citizens have the option to dedicate 0.7% of their income tax to the Catholic Church (they may also choose that the same amount go to unspecified “social services” or be divided between both). In 2010, the church earned 248 million euros from income tax returns.
In May, the opposition Socialist Party pledged to change the legislation that guarantees the church’s property tax privileges. Like Aspe, Alcalá de Henares, a city of 204,000, and tiny Amoeiro, in northwestern Galicia, have decided to bill taxes on properties that the church rents out or that aren’t being used at all. Others cities like Zamora in central Spain, will begin billing for trash collection, another charge the church has avoided.
Church representatives, including Cardinal Antonio María Rouco, head of Spain’s Council of Bishops, have stated publicly that they will comply with their legal obligations. But Rouco also suggested that a change in the tax regimen “would have a detrimental effect on other possible actions, like Caritas,” the Church’s charitable organization. The governing Popular Party (PP), which opposes a change, agrees with him. “The Catholic church fulfills a very important social function in Spain,” says Manuel Cobo, the PP’s secretary general for local policy. “Especially in extreme situations like this crisis, religious organizations offer critical assistance to our most underprivileged citizens.”
Cobo doesn’t believe that the Socialist Party’s campaign to overturn the exemption is truly motivated by economic concerns. “The Socialists were in power for the last eight years. Why didn’t they do away with the exemption then?” he asks. “They’re only doing it now because they think it will win them votes. It’s an electoral strategy.”