The Spain Prime Minister Pedro Sanchez has announced a 100 per cent tax for homes purchases by non-EU residents, but it may not impact as many people as first thought
Spain is planning to introduce a 100 per cent tax for homes bought by non-EU residents, but not all Brits will be impacted.
For Brits already living in Spain, the 100 per cent tax on second properties can be avoided. Spain’s Prime Minister Pedro Sanchez has announced a new tax up to 100 per cent, which will impact non-residents buying property from outside the EU, which includes the UK. The new tax is part of an effort to to tackle the country’s housing crisis.
However, if you are a Brit already residing in Spain and looking to buy a second property, the tax is likely not to impact you.
Hans Lenz, president of the ABINI association, and José Miguel Artieda of the API association suggested that the buyers who the tax will apply to will make up only a very small chunk of those looking to make the move, reports the Majorca Daily Bulletin.
British buyers have typically been the largest market behind German buyers, however, more than half of the British purchases in the Balearics are by people who have residency. Consequently, the measure will not affect them. They would therefore be unaffected by the measure that will place a 100 per cent tax burden on the purchase of homes.
Around a third of all purchases in the Balearics are by foreign buyers.
Alastair Johnson, owner of Moving To Spain, told the Mirror: “Firstly, and most importantly, this measure, if passed, would not stop a UK or other non-EU citizen from moving to Spain and buying a home. The policy is aimed only at non-residents, so a UK citizen living in the UK could not buy property in Spain as a second home and or as an investment property. Any legal resident of Spain (regardless of nationality) would be welcome to purchase a property.
“The other thing to note is that this is one part of a raft of policy ideas being developed to make real estate more accessible for all residents of Spain (not just Spanish citizens). The anti-tourism protests were driven by local people who were angry that they could not afford to live in the places they were born in due to massive property inflation. An estimated 27,000 properties were purchased in 2023 by non-residents, with very few benefits flowing to locals.
“In October 2024, Prime Minister Sanchez announced policy proposals encouraging new residents to come to Spain. We don’t see this policy in opposition to those proposals – Spain will still welcome UK and other non-EU citizens to move to Spain and contribute to the economy and community.”
Other measures were also announced including stricter regulations on seasonal rentals and tax exemption for landlords who rent out their properties for affordable housing, both also designed to ease the growing issue of housing in Spain. Pedro Sánchez stated that the “unprecedented” measures were necessary to meet the country’s housing emergency.
“The West faces a decisive challenge: To not become a society divided into two classes, the rich landlords and poor tenants,” he continued.
Housing affordability has been a growing issue in Spain for a while. Rent has risen, especially in cities like Barcelona and Madrid, where incomes have failed to keep up, especially for young people. Housing prices have also steadily increased, especially in cities and coastal areas.
Rental prices have also been driven up by short-term contracts mainly offered to tourists. Across 2024, Spain saw 88.5 million visitors. Mass tourism has caused some tensions, including protests on various occasions across the country.
“What citizens expect from us here is action,” Spanish housing minister Isabel Rodriguez told reporters on Tuesday about the plan.
More specific details on how the tax will work are yet to be announced, and there is currently no timeline on when the measures will be presented to parliament for approval. As of 2022, approximately 15,000 British people lived in Majorca, but the number is growing by around three to five per cent each year.