Spain plans 100% tax for homes bought by non-EU residents
- The Spanish government is planning to impose a 100% tax on properties owned by non-EU residents.
- This proposal aims to reduce housing prices and improve accessibility for local residents facing a housing crisis.
- The initiative is part of a series of reforms in response to growing public protests about housing affordability.
Spain, facing a housing crisis, is taking unprecedented measures to address the issue by proposing a new tax structure aimed at non-EU property buyers. Prime Minister Pedro Sánchez announced plans to impose a potentially staggering 100% tax on properties purchased by non-residents outside the European Union. This announcement comes amid rising concerns over the accessibility of housing for local residents compared to foreign investors, particularly those buying properties solely for rental income rather than for personal use. In 2023, non-EU residents, notably British buyers, purchased a considerable number of properties in Spain, which raised alarms among government officials. The prime minister indicated that foreign investments have exacerbated the housing shortage faced by local citizens, emphasizing the need to prioritize residential properties for Spanish residents. Sánchez highlighted that in 2023 alone, non-EU residents acquired around 27,000 properties, which, according to him, should not occur in a country grappling with significant housing constraints. The government initiated these reforms as part of a broader response to nationwide protests demanding affordable housing. While the details of the tax structure were not fully outlined, including how it would be implemented or when it would be formally proposed to parliament, government officials have indicated that a thorough study is necessary before finalization. This proposed measure is among various strategies aimed at making housing more affordable for residents, including additional support for landlords who provide affordable housing and tighter regulations on short-term rentals. This move also reflects a growing trend in European countries reassessing the influence of foreign investments on domestic housing markets, as many cities grapple with rising property prices due to influxes of foreign buyers. The expected consequences of this policy include a significant reduction in property sales to foreign investors, which the government believes will help stabilize housing prices and availability for local residents while simultaneously addressing public discontent regarding the housing market imbalance.