Spain Looks To Church For Revenue

All Things Considered:

On one side of this disagreement are cash-strapped municipalities and on the other, centuries of tradition.
Avendano says he's a Catholic himself. "We're not questioning the church's good works — charity for the elderly or poor or ill. We're not criticizing that at all. What we want is to re-examine property the church uses to make a profit," Avendano saild. "For example, rental apartments, parking lots and garages that it owns. Those are businesses."
The Catholic Church owns about half of this city. Sometimes people die and leave their house or business to the church, which then becomes the landlord.
"Some of the Catholic schools have swimming pools, and they charge a fee to area residents to swim there on weekends. So the school should be paying tax on that activity. But they haven't been," said another city councilman, Ricardo Rubio.
One Alacla street name, Calle Tercio, or One-Third Street, dates to the Middle Ages when vendors were required to give one-third of their profits to the Catholic Church.
Nowadays, there's a different tax man in town who happens to be broke. The city of Alcala de Henares is $400 million in debt.

Meanwhile, if the Catholic Church had to pay tax on all its property in Spain, it could owe up to $4 billion a year.

I don't know much about the history of the Church in modern Spain, but my understanding is that it had an extremely close and mutually beneficial relationship with Francisco Franco (one of a long line of incidents with the Church siding against democracy).  This would seem to be a major change for the Church.  It will be interesting how this plays out, as it reflects another landmark on the road to secularization for Europe.