Very limited impact in the Balearics from Spain's non-resident non-EU citizens' home-buying tax measure

Around half the British purchases are by residents

Around a third of all house purchases are by foreigners. | MDB

Andrew EdePalma14/01/2025 07:39

Balearic property sector representatives believe that Prime Minister Sánchez's announcement on Monday of a tax measure designed to limit (or prevent) the buying of homes by non-resident citizens from countries outside the EU will have a very limited impact.

Hans Lenz, president of the ABINI association, and José Miguel Artieda of the API association point out that these buyers represent only a very small segment of buyers. Lenz notes the particularly low percentage of American purchases, although the British market is a rather different matter.

This has typically been the second largest market behind German buyers. However, more than half the British purchases in the Balearics, according to notaries' figures, are by people who have residency. They would therefore be unaffected by the measure that will place a 100% tax burden on the purchase of homes.

A general response to the Sánchez announcement is that it will not make a great deal of difference to the current level of foreign buying in the Balearics, which is around a third of all purchases. There will always be other nationals - EU nationals, such as the Swedes - who will fill the gap.

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Lewis Black | 2 months ago

Just Sanchez virtue signalling to his coalition. Will never pass the smell test with the EU

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Justin Flation | 2 months ago

Estimates are 30-40% of balearic purchases are from foreign buyers. ~20% of these foreign buys are British. (if there are better estimates please add them). This would mean ~6% overall (~3% non-resident) british. I’d assume another 3% are American and maybe another 2% from other non-eu countries… 8% overall isn’t insignificant, but I do agree it’s not going to have the impact the people pushing this will think it does. I would focus on disincentivizing homes from being used as a store of value.

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