In brief
Prime Minister Pedro Sánchez announced a plan for a hefty tax of up to 100% on properties bought by non-EU residents, responding to a housing emergency.
Spain's new housing tax aims to deter non-EU buyers and prioritize homes for residents. With 27,000 properties sold to foreign investors in 2023, this unprecedented measure seeks to create a more balanced housing market.Spain is set to impose an unprecedented tax of up to 100% on homes bought by non-EU residents, including individuals from the UK. Prime Minister Pedro Sánchez emphasized this drastic measure is vital to address the ongoing housing emergency in the country. At an economic forum in Madrid, he noted a stark concern: "The West faces a decisive challenge: To not become a society divided into two classes, the rich landlords and poor tenants."Sánchez highlighted that in 2023 alone, non-EU buyers purchased approximately 27,000 properties in Spain, primarily for investment rather than residence, exacerbating the ongoing housing shortage. He stated, “Which, in the context of the shortage that we are in, [we] obviously cannot allow.” The new tax would prioritize residential housing for locals and align Spain with similar strategies used by countries such as Denmark and Canada. However, no specifics were given about how this tax will function or when it will be presented to the Spanish parliament, where Sánchez has faced challenges in garnering support for new legislation.Additionally, his office indicated that this initiative is part of a broader set of measures to increase housing affordability. Other strategies include tax exemptions for landlords offering affordable rentals, transferring over 3,000 properties to a public housing authority, and implementing stricter regulations and higher taxes on short-term rental flats. “It isn’t fair that those who have three, four, or five apartments as short-term rentals pay less tax than hotels,” Sánchez concluded.
