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

Spain is considering a significant tax rise aimed at non-EU residents purchasing homes, as part of its strategy to address a growing housing shortage exacerbated by rising property prices and gentrification. Prime Minister Pedro Sanchez announced that the government may impose a 100% tax levy on non-residents, including UK citizens, amid rising public anger over unaffordable housing costs.

The proposal follows a decade of dramatic price increases in Europe, with property values surging by 48%. Many locals are being priced out of home ownership due to escalating rents and landlords converting long-term rentals into more profitable short-term tourist accommodations. In cities like Barcelona, protests have erupted as residents express frustration over the unsustainable living conditions, prompting the mayor to promise action against short-term holiday rentals.

Sanchez emphasized the need for equitable housing access, warning against a society divided between wealthy landlords and impoverished tenants. He noted the significant influence of non-EU buyers in the Spanish property market, with approximately 27,000 homes sold annually to this group. While the specifics of the proposed tax mechanism remain unclear, potential adjustments to stamp duty and the introduction of a special tax are on the table.

Despite the urgency of addressing these housing challenges, the likelihood of the proposal passing is uncertain, given the fragmented state of Spain's parliament. As the government considers these measures, local communities continue to grapple with the implications of foreign investment on their housing markets.