Spain has revealed plans to implement a tax of up to 100% on real estate purchases by non-residents from outside the EU, including the UK, as part of efforts to address the country’s housing crisis.
The initiative, part of a series of measures announced on Monday by Prime Minister Pedro Sánchez, aims to address growing public discontent over soaring housing costs that have become increasingly unaffordable for many Spaniards.
Sánchez highlighted the broader nature of the issue, noting that housing prices across Europe have surged by 48% over the past decade, significantly outpacing household income growth.
“The West faces a critical challenge: avoiding a society split into wealthy landlords and struggling tenants,” he remarked during an economic forum in Madrid.
The proposed measures include increasing social housing availability, providing incentives for renovating and renting out vacant properties at affordable rates, and imposing stricter controls on short-term rentals. Sánchez pointed out that only 2.5% of Spain’s housing stock is allocated for social housing, a figure far lower than in countries like France and the Netherlands.
However, the proposed tax on non-EU foreign buyers attracted the most attention globally. Spain has long been a favorite destination for non-EU buyers, especially from the UK, US, and Morocco, who purchase properties in popular areas like Ibiza, Marbella, and Barcelona.
Sánchez described the proposed tax as “unprecedented” in Spain’s history. “To illustrate, in 2023 alone, non-EU residents bought around 27,000 homes in Spain. They weren’t purchasing these for personal use but rather for speculation and profit, which is unacceptable given our current housing shortage,” he stated.
Details on the implementation of the tax and its timeline remain unclear, and there is skepticism about its prospects for becoming law, with one analyst suggesting the proposal might be intended to deter foreign investors by creating “uncertainty and noise.”
The government also plans to tighten regulations on tourist apartments, often blamed for reducing rental availability and driving up prices for locals. Sánchez announced increased taxes on short-term rentals, arguing that it’s unfair for owners of multiple short-term rental properties to pay less tax than hotels.
He emphasized the urgency of these measures, calling the disparity between rising housing costs and stagnant incomes “intolerable” and underscoring the need for a comprehensive societal and institutional response to the housing crisis.
