In a bold move to combat its worsening housing crisis, Spain has proposed a 100% tax on property purchases by non-EU citizens who do not reside in the EU.
The measure, announced by Prime Minister Pedro Sánchez, aims to curb foreign real estate investments that are driving up housing costs and limiting availability for locals.
“We cannot allow speculative purchases to deepen the housing crisis. This measure is about ensuring homes are for people, not just for profit,” Sánchez said during a press conference unveiling the proposal.
The tax, which will require parliamentary approval, is part of a broader package of 12 initiatives designed to address housing affordability. Spain’s government has faced mounting pressure to act as property prices continue to outpace income growth, leaving many citizens unable to buy or rent homes.
If implemented, the tax could significantly impact British buyers, who represent a large share of Spain’s foreign property market following Brexit. Critics argue the move might deter foreign investment, but supporters see it as a necessary step to protect the domestic housing market.
“This is a critical step toward reducing inequality and prioritizing housing as a fundamental right,” Sánchez added.
The proposal’s approval remains uncertain, with Sánchez’s coalition facing challenges in securing a parliamentary majority.
Spain’s Rental Market Reaches Record Highs in 2024
Spain’s rental prices surged by an unprecedented 11.5% in 2024, reaching record levels by the end of the year, according to recent data.
The increase has further strained affordability for locals, particularly in major urban centers like Madrid and Barcelona, where demand continues to outstrip supply.
Experts attribute the sharp rise to limited housing availability, increased tourism, and heightened interest from foreign investors, all of which have intensified competition in the rental market.