Spain proposes 100% tax on non-EU property buyers to tackle housing crisis

Spain’s Prime Minister, Pedro Sánchez, has announced plans to impose a 100% tax on property purchases by non-EU buyers, including Britons, in an effort to address the country’s growing housing affordability crisis.

The measure aims to deter foreign investment in real estate, which Sánchez claims has exacerbated the issue, Caliber.Az reports referencing Financial Times. 

“The West faces a decisive challenge: to not become a society divided into two classes, the rich landlords and the poor tenants,” Sánchez said as he unveiled a set of 12 housing reform proposals.

The proposed tax would apply to non-EU citizens who are not residents of the bloc. Non-EU buyers currently purchase approximately 27,000 homes annually in Spain, a figure Sánchez described as “mainly for speculation.”

While the proposal is part of a broader effort to cool Spain’s overheated property market, critics doubt its efficacy. Antonio de la Fuente of real estate group Colliers called the measure “a drop in the ocean,” noting that it targets a small fraction of Spain’s 26 million homes. He also warned that “uncertainty and noise” surrounding the plan might deter investors.

Other reforms include increased taxes on short-term holiday rentals, the refurbishment of vacant homes, and public guarantees for landlords offering affordable rentals. Sánchez emphasized the urgency of action, citing a 48% surge in European house prices over the past decade, nearly double the rise in household incomes.

The proposal still requires parliamentary approval, where Sánchez faces significant challenges in securing a majority.

By Aghakazim Guliyev