Spain Proposes 100% Property Tax for Non-EU Buyers Amid Housing Crisis

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The Spanish government plans to implement a tax of up to 100% on the value of properties purchased by non-residents from non-EU countries, including the UK. Prime Minister Pedro Sánchez announced this unprecedented measure as a necessary step to address the country's housing emergency.

At an economic forum in Madrid, Sánchez highlighted that non-EU residents purchased 27,000 properties in Spain in 2023, mainly for investment rather than as residences. He stated, "Which, in the context of shortage that we are in, obviously cannot allow." The proposed tax aims to prioritize available homes for local residents.

While Sánchez did not disclose specific details as to how the tax would be structured or when it will be presented to parliament for approval, his office confirmed that the measure would significantly increase the tax burden on non-EU buyers, aligning Spain with other nations such as Denmark and Canada. Currently, prospective buyers, both non-residents and Spanish citizens, pay a transfer tax of approximately 10%, which varies by region.

Critics, including property professionals, argue that the tax could discourage non-EU investment and unfairly advantage EU citizens in the housing market. Some prospective buyers have already begun reconsidering their property search in Spain, citing concerns over potential future restrictions.

In addition to this measure, Sánchez outlined other initiatives aimed at improving housing affordability, including a tax exemption for landlords offering affordable housing, the transfer of over 3,000 homes to a public housing body, and stricter regulations on tourist rentals. The government has also announced plans to abolish the "golden visa" scheme, which granted residency in exchange for property purchases above €500,000.

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