All just noise - 100% tax on Spanish homes bought by non-EU residents

100% tax on Spanish homes bought by non-EU residents

Spanish prime minister Pedro Sánchez has sent shock waves through the country’s housing sector by promising a 100% tax on homes bought by non-EU residents.

Sánchez announced the move at an economic forum in Madrid on Monday (January 13) as part of a tranche of measures aimed at quelling the fast rise in housing prices.

This unprecedented proposal has led to headlines across the world, particularly in the UK where buying a home in Spain is seen as a dream by many. 

However, it is unlikely that the move will ever become a reality, and it is being viewed more as an attempt to disrupt the market than a realistic proposition. 

One analyst suggested to the Financial Times that the government’s aim was to deter foreign property investors by creating “uncertainty and noise” with a proposal that has a very slim chance of ever becoming law. The Sánchez government has long faced struggles getting legislation passed, and there is a great deal of opposition to this move.  

Sánchez gave no details of how the plan would work, or when it could be sent to parliament for approval. 

Lisa, from Lisa Frain Real Estate in Quesada, stated that the general feeling in the industry and amongst lawyers and accountants she has consulted with is that this is a distraction and will never become law. 

“Nobody is particularly worried about this, and it is very much being viewed as an outlandish proposal by a government that is under attack due to an affordable housing shortage in some parts of the country. 

“Sánchez has portrayed the buying of Spanish property by foreigners as merely speculative and has stated they do not even use the property. This is not the case, and the vast majority of purchasers are buying homes or holiday homes for themselves and their families. In coastal areas this is an important part of the economy, and we are sure that this activity will not be stopped with unreasonable tax measures.”