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Spain wants non-European Union residents to pay as much as 100% tax for home purchases in the country as it seeks to stem growing discontent over rising real estate prices.
Author of the article:
Bloomberg News
Rodrigo Orihuela
Published Jan 13, 2025 • 1 minute read
(Bloomberg) — Spain wants non-European Union residents to pay as much as 100% tax for home purchases in the country as it seeks to stem growing discontent over rising real estate prices.
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“Just to give us an idea, in 2023 alone non-European Union residents bought some 27,000 houses and flats in Spain and they didn’t do it to live in, they didn’t do it for their families to live, they did it to speculate, to make money from them, which we cannot allow in the context we live,” Prime Minister Pedro Sanchez said in Madrid on Monday.
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The government’s proposal on the 100% tax on non-EU residents’ house purchases will be sent to parliament, Sanchez said. The plan is inspired on tax regimes in Denmark and Canada, he added.
Spain’s extensive Mediterranean coastline is a popular destination for foreigners seeking a holiday residence, with the Balearic Islands one of the most popular locations. British citizens are the biggest group of non-EU property buyers.
In recent years, Madrid has also become a popular market for wealthy Latin Americans, who are snapping up property in central parts of the city and have helped push up prices across the entire capital.
Sanchez’s announcement Monday was part of a broader package that seeks to tackle a brewing housing crisis. The new measures include a commitment to move thousands of houses from the country’s bad bank into a newly created housing agency, as well as a plan to offer state-backed financial guarantees to young renters.
Spain has a severe shortage of new homes. Late last year, the Bank of Spain estimated that the country would need some 550,000 new residences to be built to meet demand over the next two years. Sanchez said on Monday that some 90,000 new houses are built annually to cover demand for 300,000.
—With assistance from Jorge Zuloaga.
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