Spain is set to impose a groundbreaking 100% tax on property purchases by non-EU residents, Prime Minister Pedro Sánchez announced, as the government seeks to tackle a growing housing affordability crisis. The measure, described as "unprecedented," aims to curb the impact of foreign buyers on the housing market, particularly those who purchase properties for investment purposes.
In a speech at an economic forum in Madrid, Sánchez highlighted the severity of Spain’s housing shortage, citing that 27,000 properties were purchased by non-residents from outside the EU in 2023.
"These homes are not being bought to live in but to profit from, which, given the housing shortage, we cannot allow," Sánchez said.
Non-EU residents currently account for a significant portion of the Spanish property market, which saw 87,000 sales to foreigners last year, about 15% of total transactions. The government argues that restricting purchases by this group will prioritize housing access for local residents.
Under the proposed tax, non-EU residents classified as non-residents—those spending fewer than 183 days annually in Spain—would face a 100% surcharge on the value of any property purchased. This aligns Spain with countries like Denmark and Canada, which have implemented strict measures to deter foreign property speculation.
The exact timeline for the legislation is unclear, as it requires approval in parliament, where Sánchez has faced challenges passing previous reforms.
The proposed tax is part of a broader housing reform package, including:
- Tax exemptions for landlords providing affordable housing.
- Creation of a public housing body to manage over 3,000 properties.
- Tighter regulations and higher taxes on short-term tourist rentals.
Sánchez also announced the upcoming abolition of the "golden visa" scheme, which fast-tracked residency for foreign buyers of properties worth €500,000 or more.
While the government positions the policy as a step toward social equity, critics warn it risks alienating foreign investors who contribute to Spain's economy. The prime minister, however, emphasized that the initiative was about prioritizing the needs of local residents over speculative property purchases.
"This is about ensuring Spain remains a livable, equitable country for all," Sánchez said.
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