Spanish Prime Minister Pedro Sanchez announced this morning that non-resident citizens from countries outside the European Union (Britain and U.S. included) would face a massive tax bill if they wanted to buy a home in Spain. It was one of a series of measures announced by the government to try and make homes more affordable and available for Spanish citizens.
According to El Econimista one of the star measures is the limit on purchases by non-EU/ non-resident foreigners. "For them, the tax burden will be up to 100% of the value of the property," Sánchez announced.
"In 2023 alone, non-residents from outside the European Union bought 27,000 houses and flats. Not to live in them, but mainly to speculate. To make money out of them. Something that, in the context of the shortages we are experiencing, we cannot afford’, said Sanchez said.
Spain is battling with a major housing shortage and the Spanish government and local authorities (including the Balearics) have spoken about trying to limit the sale of homes to non-resident Britons.
If this new legislation become law then it will be a major blow for thousands of Britons and Americans who dream of owing a holiday home in Spain despite the 90 day law which limits the amount of time they can spend in Spain.
12 Measures presented by PM Sanchez
Let's get to work’. This is how the President of the Government, Pedro Sánchez, concluded his presentation of the 12 measures to facilitate access to housing in Spain.
1. The State has transferred more than 3,300 homes and almost 2 million square metres of residential land to the recently created Public Housing Company, to build thousands of protected flats for affordable rent.
2. Throughout the first half of the year, the Public Housing Company will begin to incorporate the more than 30,000 homes currently held by SAREB, 13,000 of them immediately.
3. It is intended to approve a legal mechanism so that the new Public Housing Company will have priority in the purchase of housing and land, and another to guarantee that all housing built by the State will remain in public ownership indefinitely.
4. The purchase of housing by non-resident non-EU foreigners will be limited, which will be done by increasing the tax burden to 100% of the value of the property.
5. The regulation will be tightened to prosecute fraud in seasonal rentals and a fund will be created so that regional and municipal governments can reinforce inspections.
6. Tax reform will also be taken to Congress to ensure that tourist flats are taxed as a business, promoting, within the framework of the new European directive on VAT, the application of a tax on tourist rentals that puts them on a par with other economic activities.
7. In addition, the aim is to change the system of tax advantages that SOCIMIS have so that they only apply to the promotion of affordable rental housing.
8. A system of public guarantees will be applied to protect owners and tenants who participate in affordable rentals.
9. An aid programme will be set up for the rehabilitation of empty homes to make them available for affordable rent.
10. The Government will propose to the Congress of Deputies the approval of a 100% personal income tax exemption for homeowners who rent their homes according to the Reference Price Index, without the need for them to be located in areas declared to be under stress.
11. The Government will create a new Strategic Project of the Recovery Plan (PERTE) aimed at boosting innovation and modernisation of the industrialised and modular construction sector. It will be located in the province of Valencia to contribute to the reconstruction of the economic fabric affected by the dana.
12. Maintain and increase the aid programmes that will be included in a new State Housing Plan.
Foreign property buyers in Spain
British........ 8.37 percent
Germans......6.8 percent
Morrocans.....6.1 percent
Romanians.....5.3 percent
French...........5.2 percent
Italians..........5.1 percent
Dutch.............5.1
Belgiums........4.6
Additional reading: (In Spanish)
https://www.ultimahora.es/noticias/nacional/2025/01/13/2304527/sanchez-anuncia-medida-inedita-espana-dificultatara-compra-viviendas-extranjeros-extracomunitarios.html
https://theobjective.com/economia/2025-01-13/gobierno-compra-vivienda-extranjeros-extracomunitarios/
In English
https://www.ft.com/content/8e2e9f04-1606-4d2d-8b9c-0094b1cef038
https://www.bloomberg.com/news/articles/2025-01-13/spain-to-try-to-limit-real-estate-purchases-by-non-eu-residents
10 comments
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So, forcing out top end American and Non EU buyers, while inviting 300,000 thousand migrant workers from Africa is going to solve a housing crisis ? Maybe he can turn the affluent areas into street selling Barrios. Without Swedish investment, parts of Palma would still resemble the 70s Bronxs.
Sanchez is a Poundland Prime Minister, who will go soon. This will never happen, the guy is weak and full of 💩
I wonder how many of those bleating about this were cheering on Boris and his ilk while Brexit was being debated? Sometimes you get what you vote for.
Lewis BlackWhich is how he has managed to stay in power since day one. Say what you like, but he is a very clever politician. Absolutely no shame or consience. And his base let him get away with it as long as the “right” don’t get into power.
If I'm not mistaken, if you're non-resident, buy a property and sell it, it's like 25% capital gains tax? Or is it higher? If you're resident, and own the property less than 10 years before selling, I believe it's the same or maybe slightly less. My gestor explained this for me a few years ago. I don't think it's changed much. That alone puts quite a damper on "speculation". 100% tax is probably a little optimistic me thinks.
Spain has obligations under its membership of the OECD. Suggests someone reads them . Fair and equitable access and non discrimination of none nationals being one of them.
Well the international obligations under Spains membership of the OECD should be read before introduction of populist measures. Equally fair and unbiased access to property. Spain did sign in 1960. The Donald may have the odd retaliatory action if the good old USA is disadvantaged. Like preventing Spain companies buying USA buildings like hotels.
Richard PearsonUnfortunately Pedro's thinking is firmly entrenched as a Bolshevik - the EU will never allow such discrimination and he knows it but it's got him a headline to his base and that probably buys him a few more months of his coalition.
This seems somewhat logical to address the problem. However I’m not sure on the execution. Are they creating a rush of investment before this goes into effect?? Why not apply it to the annual taxes on the property? It’s simple supply and demand. Spain has a lot of desirable property, which attracts a lot of investors. The average Spanish resident can’t compete with an American. That being said, there’s plenty of speculators that reside within Spain and the EU… I would manage any expectations on how effective this would actually be.
Which, if this proposal prospers, will mean that their only option, if they wish to reside in Spain which isn’t a given, will be to rent, pushing the prices even higher and even more out of reach of the normal working person. Great thinking Pedro.