Spain is going full-scale in solving the ever-increasing problem of housing and is, accordingly, bringing new measures in front of its population, announcing up to 100% tax charges on the acquisition of real estates by non-EU resident investors, especially in countries such as the UK.
The proposed tax is part of a wider package of measures presented by Prime Minister Pedro Sánchez, aimed at curbing soaring housing costs that have made homeownership increasingly out of reach for many in Spain.
The move to tax non-EU residents, who have historically been a major source of demand for Spanish real estate, is part of the country’s broader strategy to combat rising housing prices. The measure has attracted much publicity in the UK, US, and Morocco, with clients thronging to Ibiza, Marbella, and Barcelona. The quoted Sánchez described the tax as “unprecedented” in the history of Spain, and it is “key to resolving the country’s housing deficit.”
In 2023, non-EU citizens bought approximately 27,000 houses and flats in Spain. However, Sánchez said that most of those houses were bought for speculative purposes, in an attempt to make more money than they could achieve through simple and potential personal use.
“They did it to speculate, to make money from them, which we cannot allow in the context of a housing shortage,” he said during his speech at an economic forum in Madrid. This influx of foreign buyers has led to a lack of affordable housing for Spaniards, especially in popular tourist areas.
Solution To The Housing Crisis
Among other measures, the new housing strategy adopted by Spain has included a 100% tax on foreign buyers. Sánchez said that one of the problems that needs to be tackled is the surge in housing prices over the last decade. Housing prices have gone up by 48% in Europe as a whole, and he said Western societies are at risk of being divided between property owners who will own everything and tenants who will fight for their homes.
Among these is the development of social housing supply. For now, 2.5% of the total housing stock in Spain consists of social housing. This figure is much smaller compared to the likes of France and the Netherlands, for instance. This is aside from increasing social housing. The government also intends to encourage property owners to renovate their properties for rentals at affordable prices.
Crackdown On Seasonal Rentals
Seasonal rental regulation was also one of the proposed measures where seasonal rentals are blamed for having reduced long-term rental properties in the region, available for locals. Sánchez was proposing tightening up short-term rentals regulation by increasing taxes from those owning more than one property, which is utilized for this short-term renting. He argued that such people own multiple apartments, to be used as short-term rental places, hence paying lower taxes than the hotel.
“The taxes paid by short-term rental owners need to reflect the reality of the housing shortage,” Sánchez added, underscoring the government’s commitment to ensuring that rental properties remain accessible to locals.
The tax, which will target non-EU property buyers, is at its infancy, but it’s the first time that Spain takes such a strong position in dealing with its housing market. Details about the implementation and how soon the bill will reach parliament are still unclear. Analysts say that there’s little chance for the bill to be approved into law, with some speculating that the real motive of the government is to keep foreign investors on their toes.
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