Spain is set to introduce a groundbreaking tax on properties bought by non-residents from countries outside the European Union. Prime Minister Pedro Sánchez announced this ambitious measure alongside a series of initiatives aimed at combating the nation’s ongoing housing affordability crisis. This proposed tax, which could reach as high as 100%, targets purchases made by non-EU citizens, including those from the UK, who acquired 27,000 properties in Spain in 2023. The announcement was made during an economic forum in Madrid on Monday.
The prime minister highlighted that many of these properties were acquired “not to live in” but “to make money from them.” This move aims to alleviate pressure on the housing market, addressing what Sánchez described as Spain’s housing emergency. In addition to this unprecedented tax, the government plans to exempt landlords who provide affordable housing from certain taxes and transfer over 3,000 homes to a new public housing body.
Tackling the Tourism Rental Market
Further measures include tighter regulation and higher taxes on tourist flats. Sánchez emphasized the need for equitable taxation, stating:
“It isn’t fair that those who have three, four or five apartments as short-term rentals pay less tax than hotels.” – Prime Minister Pedro Sánchez
He further stressed the urgency of the situation:
“Which, in the context of shortage that we are in, [we] obviously cannot allow.” – Prime Minister Pedro Sánchez
While the prime minister described the tax as “unprecedented,” he did not provide specific details on its implementation. Additionally, there is no timeline for when this tax will be presented to parliament for approval. Sánchez has historically faced challenges in securing sufficient parliamentary support for his legislative initiatives.
The proposed measures reflect a robust approach to tackling housing issues, combining taxation and regulatory strategies to curb speculative property investments by non-residents. As Spain grapples with a housing shortage, these initiatives underscore the government’s commitment to ensuring affordable housing for its citizens.
Author’s Opinion
Spain’s proposed tax on non-EU property buyers is a bold and necessary step to address the nation’s ongoing housing affordability crisis. By targeting speculative investments, particularly those driven by non-residents, the government is sending a clear message that housing should be for people to live in, not just an investment vehicle. While the details of the tax remain unclear, these measures, combined with additional regulatory actions, demonstrate a commitment to preserving affordable housing for Spanish citizens. However, challenges remain, particularly around gaining parliamentary support and ensuring that these initiatives lead to tangible, long-term changes in the housing market.
