Housing in Spain has been at the forefront of the country’s potential investment opportunities over the last two years. However, a proposed 100% tax for all non-EU property buyers has left many investors and property experts concerned.
Prime Minister Pedro Sánchez announced the proposal, calling it necessary to combat Spain’s “housing emergency.”
The Proposal
Prime Minister Pedro Sánchez stated the measure as “unprecedented” and essential in his plans to address Spain’s housing shortage. He pointed to 2023 statistics showing 27,000 properties purchased by non-EU residents.
Prime Minister Sanchez claimed these properties were often not bought for personal use but as investment opportunities, potentially worsening housing inequality in the country. Stating:
“The West faces a decisive challenge: To not become a society divided into two classes, the rich landlords and poor tenants,”.
Under the proposal, non-resident, non-EU buyers could face a 100% tax on property purchases. Non-residents are defined as those spending fewer than 183 days a year in Spain.
The government argues that the proposed changes will prioritize housing availability for Spanish residents, looking at other countries that have implemented similar policies, including Canada and Denmark.
Housing Affordability Measures
This proposal is part of a broader set of housing reforms announced by the Spanish government. Other measures include:
- Tax exemptions for landlords offering affordable housing.
- The transfer of over 3,000 homes to a new public housing body.
- Increased taxes and tighter regulations on short-term tourist rentals.
Sánchez criticized the disparity between short-term rental owners and hotels, stating, “It isn’t fair that those who have three, four, or five apartments as short-term rentals pay less tax than hotels.”
Concerns from Spain Property Experts
The Spanish property market has seen a significant increase in non-resident buyers, who accounted for 15% of the market in 2023. Experts warn that such a drastic tax could deter foreign investment and have a knock on effect on other sectors, including tourism, particularly after the announcement of the Spain Golden Visa ending in April 2025.
Simon Creed of Azahar Properties noted that Valencia, where non-residents currently pay a 10% transfer tax, could be heavily impacted. “Naturally, who wants to pay 100% purchase tax for buying a property here?” he said. “This proposal will benefit EU buyers but feels unfair to non-EU buyers, particularly those from the UK.”
Antonio de la Fuente, managing director at Colliers International Spain, questioned the tax’s effectiveness in solving the housing crisis. “We all agree we need more housing supply, but this measure will only be a drop in the ocean,” he said, believing that looking for ways that encourage new construction and development in Spain would have a greater impact.
Read our Spain Golden Visa Guide
What You Can Do Today
For potential investors looking at buying property in Spain, timing is crucial. If you act before any new taxes are implemented, you may avoid these potential costs entirely. You should consider:
- Consulting with property experts to understand your options.
- Taking advantage of the Golden Visa Spain program before its scheduled end in April 2025.
- Speaking with an expert migration firm to look into which countries offer the ideal solution for your needs.
While the proposal is still under review, it’s vital to stay informed about developments that could reshape Spain’s real estate market. Whether the tax is implemented or not, understanding its potential impact is key to making informed investment decisions.
