Sanchez on January 13 unveiled a proposal to tax by up to 100% the acquisitions of property by non-EU citizens not living in Spain as part of a series of measures seeking to boost supply and reduce demand for housing in the country. A source close to Sanchez played down the suggestion of a ban, saying the plan remained to discourage these acquisitions through increased tax rates.
Either potential change would need to pass the lower house where Sanchez's minority government faces a constant struggle to pass any bill. Either way, there will be damage to Spain's reputation, said real estate company CBRE. "All factors related to regulatory and juridical changes are discouraging investors," said Paloma Relinque, CBRE's executive corporate director for Spain. Housing has become a major issue in Spain as it struggles to balance promoting tourism, a key driver of its economy, with concerns over high rents due to gentrification and landlords shifting to more lucrative, short-term tourist rentals, especially in urban and coastal areas.
The country's Central Bank recently estimated there could be a deficit of half a million houses in Spain by the end of this year. Targeting non-resident foreigner buyers, who tend to buy second homes particularly in beach resorts, would have a limited effect on the housing market as a whole, a spokesperson for real estate developer Gilmar said. Non-EU residents represent about 23,000 of the almost 700,000 homes bought and sold every year in the country, Sanchez said during the rally.
One Bulletin reader commented online: "Tell me something, there are scores of properties all across Mallorca that are totally out of the price bracket for locals. What happens to these properties should the anti-foreigner taxes be implemented and the foreigners depart for more welcoming locations? They'll just lie vacant and rot. Where's the benefit to anyone in that?"
Another wrote: "OK so with this change, what is going to happen? The germans, scandinavians and other EU neighbours will buy them! The 90 day rule has already scared away many brits from buying. This will not stop with the UK. Why not follow the lead of other countries and invest in shared ownership properties and government backed buying schemes paid for from the taxes paid on property purchases. Build more blocks of rent controlled properties or properties only available to local people with the taxes paid on holiday lets.
"I understand there is a huge problem not only for locals but for all the other tax payers that have chosen to live and work here its a problem for everybody. The tax revenue made from the sale of properties is huge as well as all of the other services gardeners, builders cleaners the revenue lost by stopping the sale of properties is huge! Also, devaluing properties is also a huge problem for the banks who have leant billions out on the housing stock in Spain. 2007 all over again?? A solution to the problem is 100% needed but this is not it." And over 65 percent of readers maintain Spain is taking the wrong approach to solving the housing problem.
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Organ WelshmanYour comment in my view is childish. Due to your name I assume you can't vote in Spain. However if you can vote in Wales you could make sure the up to 300% council tax on holiday homes could be revoked.
Organ WelshmanHe's still the most popular leader of all the main parties so he's doing something right.
Maybe Sanchez would be wise not to threaten USA citizens , Lest the great orange Donald hears. Spain will be on the 2% nato contribution radar delinquent list anyway with only 1% of spend. So applying diplomatic caution might be wise, and abide by OECD rules.
Poor litlle Pedro, the Poundland prime minister can't get anyone to support his stupid and illegal ideas. Get rid off this incompetant asap.
What did Brits expect when they voted for Brexit, that things would just carry on as before?