There Spain is considering introducing a tax up to 100% on the value of properties purchased by non-residents coming from non-EU countries, including the United Kingdom and the United States. Prime Minister Pedro Sánchez announced this proposal as a necessary measure to address the housing emergency in the country.
During an economic forum in Madrid, Sánchez underlined that the goal is limit the purchase of property by foreigners who, according to him, buy houses not to live in but to speculation. In fact, in 2023, around 27,000 properties were purchased by non-EU residents, often for investment purposes rather than for residential use.
The new tax aims to make more homes available to local residents, thus relieving pressure on the housing market and counteracting price increases caused by speculation. Sánchez’s proposal fits into a context of growing frustration public towards the phenomenon of overtourism and the proliferation of short-term rentals, such as those offered by platforms such as Airbnb. The measure also calls for tighter regulation and higher taxes on short-term rentals to ensure these properties pay taxes like traditional businesses.
How industry operators reacted
Reaction to this proposal has been mixed. Some real estate industry players have expressed worry due to the impact that such a high tax could have on the market, especially for non-EU buyers. Other experts believe that the measure will solve the housing crisis and suggest that there are more effective alternatives.
The proposal has already sparked concern among potential foreign buyers, some of whom are re-evaluating their purchase plans in Spain. While Sánchez has described the measure as a necessity to prevent Spain from becoming a society divided between rich landowners and poor tenants, it remains to be seen if he manages to obtain parliamentary support necessary for approval.
In addition to the tax on foreign buyers, the government announced other measures to improve housing affordability, such as tax incentives for landlords offering affordable rentals and the allocation of new homes to a public housing authority. However the plan could meet significant obstacles in parliamentwhere Sánchez’s minority government has often had difficulty getting its legislative proposals approved.