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15-01-2025
MADRID: Spain is planning to impose a tax of up to 100% on the value of properties bought by non-residents from countries outside the EU, such as the UK.
Announcing the move, Prime Minister Pedro Sánchez said the “unprecedented” measure was necessary to meet the country’s housing emergency.
“The West faces a decisive challenge: To not become a society divided into two classes, the rich landlords and poor tenants,” he said.
Non-EU residents bought 27,000 properties in Spain in 2023, he told an economic forum in Madrid, “not to live in” but “to make money from them”.
“Which, in the context of shortage that we are in, (we) obviously cannot allow,” he added. The move was designed to prioritize available homes for residents, the Spanish prime minister said.
Sánchez did not provide any more details on how the tax would work nor a timeline for presenting it to parliament for approval, where he has often struggled to gather sufficient votes to pass legislation. His office described the proposed measure as a way to limit the purchase of homes by “non-resident non-EU foreigners”.
It added: “The tax burden that they will have to pay in case of purchase will be increased up to 100% of the value of the property, in line with countries such as Denmark and Canada.” The Spanish government said the proposal would be finalized “after careful study”.
It is one of a dozen planned measures announced by the Spanish prime minister on Monday aimed at improving housing affordability in the country.
Other measures announced include a tax exemption for landlords who provide affordable housing, transferring more than 3,000 homes to a new public housing body, and tighter regulation and higher taxes on tourist flats.
“It isn’t fair that those who have three, four or five apartments as short-term rentals pay less tax than hotels,” Sanchez said.
Sánchez said in a Madrid economic forum, as reported by The Guardian: “The west faces a decisive challenge: to not become a society divided into two classes, the rich landlords and poor tenants.
“Just to give an idea, in 2023 alone non-European Union residents bought around 27,000 houses and flats in Spain. And they didn’t do it to live in them, they didn’t do it for their families to have a place to live, they did it to speculate, to make money from them, which we, in the context of shortage that we are in obviously cannot allow.”
The Prime Minister emphasized how serious the issue was and what potential economic and social implications could arise if the housing crisis were to continue.
No further information regarding how the proposal would work or when it would be approved and finalized was given.
Other major European economies such as Ireland and the Netherlands, amongst others have also been facing housing crises in the last several months.
Spain’s reputation as popular second-home destination at risk
Spain has long been one of the most popular destinations for second and holiday homes, especially in areas such as Barcelona, Ibiza and Marbella.
A significant portion of the interest comes from US, UK and Moroccan buyers while interest from Venezuelan and Mexican buyers has grown over the past few years.
Opponents of the plan argue that such restrictions could have a major impact on the country’s tourism sector which is a major contributor to the country’s economy.
Other measures proposed to tackle the housing crisis include increasing social housing supply, as well as tightening restrictions on short-term rental apartments.
Sanchez also suggested giving incentives for renovating and renting out available properties at fair prices. (Int’l Monitoring Desk)
