"Industry reacts as Spain mulls 100% property tax on non-EU buyers"

Spain’s prime minister Pedro Sánchez said on 13 January that its government will plan “after careful study” a tax of up to 100% on real estate bought by non-residents from countries outside the EU in a bid to address the country’s housing crisis.

This was the tenth of 12 proposed measures which he highlighted was against the backdrop of a 48% leap in houses prices over the past decade across Europe.

It would be aimed at limiting property purchases by “non-resident non-EU foreigners. The government will increase the tax burden on such purchases, up to 100% of the property’s value”.

He was speaking at the forum ‘Housing, the Fifth Pillar of the Welfare State‘, alongside the senior leadership of his government, representatives from the construction sector, and social stakeholders, to present the main points of a plan which he said was inspired by models from countries like Denmark and Canada.

“The west faces a decisive challenge: to not become a society divided into two classes, the rich landlords and poor tenants”, he said.

This was “an unprecedented measure in our country’s history, already applied in other democracies like Denmark and Canada, and highly appropriate given the housing emergency situation,” Sánchez said, adding that in 2023, non-residents bought 27,000 properties in Spain, primarily for speculation.

But Sánchez did not detail how the tax would work or timeline for parliamentary approval, while the government said the proposal would be finalised “after careful study”.

In early reaction, Mauro De Santis Bo, financial adviser at GSB Wealth said: “With years of experience helping Britons relocate to Spain, we know how popular it is for its lifestyle and climate. However, Spain’s proposed 100% tax on property purchases by non-EU buyers could shift interest toward alternatives like Portugal, Cyprus, or Greece.

“Also, in response to the Prime Minister’s claim that people are buying for ‘mainly for speculation’, this has not been my experience, instead it’s about creating a home or enjoying retirement. We’ll be monitoring these changes closely to help clients make informed decisions and consider alternative destinations if needed.”