Spain pushes ahead with plan to tax non-EU home buyers 100%
[MADRID] Spain's government is pushing ahead with a controversial proposal to hit non-European Union residents with a 100 per cent tax when buying homes, as it seeks to tackle a brewing housing crisis.
Prime Minister Pedro Sanchez's Socialist party presented the plan as part of a broader housing Bill submitted to Parliament on Thursday (May 22). The Bill seeks to promote 'measures that enable access to housing, since we are facing one of the largest problems our society is currently confronted with,' according to a copy of the draft legislation seen by Bloomberg.
Sanchez first announced plans to create the new tax in January, in an attempt to address growing discontent over surging real estate prices and housing shortages in areas including Madrid and Barcelona. At the time, Sanchez said foreigners were snapping up homes and speculating on price increases, and that non-EU residents bought 27,000 properties in 2023.
UK citizens are the biggest foreign buyers of Spanish property, mainly in coastal regions such as Valencia, Andalusia and the Balearic Islands. Germans, Dutch and other EU citizens will be exempt.
It's far from certain that the Bill will be approved in Parliament, as Sanchez has struggled to pass legislation since he formed his current government in 2023. The premier leads a minority coalition and needs support from about eight parties whenever he wants to get laws through – something he doesn't always achieve.
To fight the housing shortage, the central and local administrations are also clamping down on holiday rentals, with Barcelona aiming to ban all short-term rentals by 2029. Sanchez's government is also seeking to create a private-public scheme to build homes through industrial systems, that make construction both faster and cheaper than traditional brick-and-mortar building. BLOOMBERG
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