Spain has unveiled plans to impose a tax of up to 100 per cent on property bought by non-EU residents, in a bid to address the country’s housing crisis.
The move, which would deter Britons from buying homes there, was announced as part of a range of measures proposed on Monday by Spanish prime minister Pedro Sánchez.
The 12 reforms come amid an ongoing row over the impact of foreigners snapping up homes in the country, impacting house prices for locals. The tax would be introduced for those from outside the European Union who do not currently live in Spain.
The levy could be as high as 100 per cent of the value of the home, according to the proposals from the Spanish government – much higher than current rates. At present, real estate purchases in Spain are subject to a 10 per cent tax on newly built homes, and 6 per cent on old properties. The plan includes a number of measures aimed at reducing the impact of holiday rental apartments on the property market, following local protests calling out the effects of “over-tourism” in holiday hotspots including Barcelona and Alicante.
Spain’s housing crisis saw house prices increase by an annual average of 8.1 per cent in the third quarter of 2024, with experts citing the main reason being demand outpacing supply. The country’s last housing census from 2021 recorded 3.8 million empty properties, equating to around 14 per cent of Spain’s housing stock, prompting anger towards those owning second homes in the country.
In June last year, protesters in Barcelona held signs which read, “Tourists go home,” in reaction to the damage they believe tourists have done to the popular city. The country saw some 42 million tourists flock to its shores during the first half of last year alone.
In October, thousands took to the streets of Madrid to protest over the country’s housing shortage, with residents calling for stronger rent controls, more social housing, and a halt to real estate speculation. During the protest, the slogan “Vivienda para todos” (“Housing for all”) rang through the streets, whilst accusing the government of failing to effectively tackle the housing crisis.
“There are too many Airbnbs and not enough homes,” Mr Sánchez said.
Sánchez has accused the 27,000 foreigners from outside the EU who own homes in Spain as of 2023, of purchasing the properties “not to live in them, but to speculate”. He added that housing is one of the “main challenges” facing Western countries, noting: “Average house prices in Europe have risen by 48pc in the last decade and it is unbearable.”
“The west faces a decisive challenge: to not become a society divided into two classes, the rich landlords and the poor tenants,” said Sánchez as he unveiled a set of 12 measures.
The proposal, if passed, could have a major impact on older Britons buying retirement homes in sunny Spain. The number of UK citizens who are officially registered as living in Spain has risen in recent years – from 276,089 to 284,037 to 2023, according to the El Padrón registry.
In Barcelona, a complete ban on short-term apartments designed for holidaymakers will be introduced in November 2028, following an announcement from the city’s mayor, Jaume Collboni, while Malaga has stopped issuing new permits in areas which are seen as having reached saturation point.
The measures include the establishment of a new rule which will mean that the government’s newly created Public Housing Company is in a position to “build thousands of affordable rental homes for families.”
More social housing will be constructed, according to the plan. A total of 30,000 homes will be provided, including 13,000 in the first half of the year.
The plan will also legally guarantee that all housing built by the State maintains its public ownership.
In addition, regulations around seasonal rentals will be tightened and a new public system to ‘protect owners and tenants’ is set to come into force.