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Spain plans to impose a 100 percent property tax on buyers from non-EU countries such as the UK in a bid to improve housing affordability by deterring foreign purchases.
Prime Minister Pedro Sanchez has announced a plan to impose a punitive property tax, which will be applied to non-EU citizens who are not resident in the bloc, as part of a raft of measures aimed at tackling a “serious” housing crisis.
Spain It is one of many European countries where public anger is mounting over the difficulty of finding affordable housing to buy or rent as property prices rise and new construction lags behind demand.
“The West faces a crucial challenge: not to become a society divided into two classes, the wealthy landlords and the poor tenants,” Sanchez said as he unveiled a set of 12 measures.
Spain has long been a popular destination for holiday home buyers and people seeking to move permanently to a sunnier climate.
The government's proposals come as prices rise in places ranging from Madrid to Mallorca partly due to a new wave of wealthy foreigners from the United States, Mexico and Venezuela. They complement the British, who form the pillars of the property market in some coastal areas, and are now non-EU citizens because Britain's exit from the European Union.
Sanchez's Socialist-led government said it would “restrict” property purchases by non-EU citizens who do not live in the bloc by mandating that the taxes they must pay on purchases increase to “up to 100 percent of the property value.” “The property.”
The Prime Minister said that non-EU residents buy 27,000 homes a year in Spain, adding that this is “mainly for speculation.”
Property buyers in Spain are likely to be subject to several taxes depending on whether they are purchasing a new build or an existing home.
Rates vary by region, but as a rough guide estate agents say the total tax bill can range between 7 per cent and 12 per cent of the property value. Sanchez did not specify which tax he was referring to.
The government said the proposal would only be finalized “after careful consideration.” To become law, it would also need approval from Spain's parliament, where Sánchez faces a perpetual struggle to gather the votes he needs to reach a majority.
In the third quarter of 2024, non-Spaniards bought 24,700 properties in Spain, representing 15 percent of total property purchases in the country.
The largest group of non-Spanish buyers were the British, who accounted for 8.5 per cent of all foreign deals. They were followed by Germans, then Moroccans, then Poles and Italians, according to data from the Spanish Registrars Association.
Underscoring the continental reach of the housing problem, Sanchez said house prices in Europe had risen by 48 percent in the past decade, nearly double the increase in household income over the same period.
“We are facing a serious problem with enormous social and economic implications, which requires a resolute response from society as a whole and public institutions at the forefront.”
