INTERNATIONALReal Estate News

Spain proposes 100% tax on non-EU buyers amid housing crisis

Spainโ€™s Prime Minister, Pedro Sรกnchez, has unveiled plans for a groundbreaking 100% tax on property purchases by non-EU residents, targeting foreign investors as part of a broader strategy to address the nationโ€™s housing affordability crisis.

The measure, announced during an economic forum in Madrid, aims to combat skyrocketing housing costs that Sรกnchez described as creating a โ€œsociety divided into rich landlords and poor tenants.โ€

The Guardian reported house prices in parts of Spain have risen by 48% over the past decade, far outpacing household income growth.

Sรกnchez highlighted that in 2023 alone, non-EU buyers purchased around 27,000 properties in Spain, with many used for speculation rather than residency.

The proposed tax seeks to curb this trend, particularly in popular areas like Ibiza, Marbella, and Barcelona.

The proposal is part of a wider slate of housing reforms, including increased social housing supply, incentives for renovating and renting out empty properties at affordable rates, and stricter regulations on tourist rentals.

Sรกnchez argued that short-term rentals exacerbate the housing crisis, stating: โ€œIt is not fair that those who own multiple apartments for short-term rental pay less tax than hotels.โ€

While Sรกnchez described the tax as โ€œunprecedented,โ€ its chances of becoming law remain uncertain.

Analysts suggest that the proposal may primarily aim to create uncertainty among foreign investors.

Despite this, Sรกnchez stressed the need for bold measures, calling the housing crisis an โ€œunbearableโ€ challenge with significant social and economic implications.

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Catherine Nikas-Boulos

Catherine Nikas-Boulos is the Digital Editor at Elite Agent and has spent the last 20 years covering (and coveting) real estate around the country.