Spain Plans to Introduce 100% Tax on Foreigners Buying Property

The Spanish government has proposed a 100% tax on the value of a property for non-EU buyers to improve affordability and reduce speculative purchases by foreigners.

Prime Minister Pedro Sánchez announced the move as part of measures to tackle a “serious” housing crisis. The proposal requires approval from parliament, where the government does not have a strong majority, which could make it difficult to pass.

Non-EU residents will have bought around 27,000 homes in Spain in 2024, a small fraction of the 26 million total. Some experts have questioned the effectiveness of the proposed tax, warning that it could discourage investors.

Additional measures include higher taxes on short-term rentals, the creation of a public housing stock and support for affordable rents. These initiatives are aimed at addressing rising house prices and widening income gaps in Spain and other European countries.

Sánchez’s announcement is part of a larger package of measures to tackle the housing crisis. Among them are the transfer of thousands of properties from the country's "bad bank" (Sareb) to a new housing agency and a plan to provide government financial guarantees for young renters.

Source: bloomberg.com