Spain Proposes Up To 100% Tax on Homes Bought By Non-EU Residents

Spain’s Prime Minister Pedro Sánchez has announced a controversial plan to impose a tax of up to 100% on properties purchased by non-EU residents, including post-Brexit UK citizens. The proposal, part of a broader package to address Spain’s housing crisis, aims to curb property speculation and prioritize housing access for residents.  

Speaking at a forum on housing, Sánchez described the measure as “unprecedented,” emphasizing the urgent need to address soaring property prices and rents. "The West faces a decisive challenge: To not become a society divided into two classes, the rich landlords and poor tenants," he said. Property prices across Europe have risen 48% in the last decade, outpacing household income growth and exacerbating inequality.  

Non-EU residents, including British buyers, purchased 27,000 properties in Spain in 2023, often as holiday homes or rental investments rather than permanent residences. Sánchez criticized this trend, stating it reduced the housing supply for locals. "They did so not to live, but to speculate, to make money with them, something that in the context of scarcity we cannot afford," he said.  

How could the tax be implemented?

The proposed tax could be implemented by modifying stamp duty or introducing a special levy, though the details and timeline remain unclear. Sánchez faces an uphill battle in Spain’s fragmented parliament, where passing such measures has proven challenging in the past.  

This proposal is one of 12 measures unveiled to tackle Spain’s housing shortage. Other initiatives include offering tax relief to landlords who provide affordable rentals, increasing public housing stock, and tightening regulations on short-term holiday lets. Sánchez argued that owners of multiple short-term rentals should face similar taxes to hotels, which bear a heavier tax burden.  

Tension over tourism in Spain heightens

The growing reliance on tourism has also fueled tensions in Spain. Tourist hotspots like Barcelona and the Canary Islands have seen protests against “over-tourism” and rising rents. Some locals have taken to direct action, such as spraying tourists with water pistols, to voice their frustration.  

Tourism, which accounts for over 13% of Spain’s GDP, remains a key economic driver. In 2024, Spain welcomed over 88.5 million international visitors, with the UK making up the largest group. However, critics argue that the boom in tourism-related rentals has worsened the housing crisis, pushing many residents out of urban and coastal areas.  

Spain’s government has already moved to curb foreign property ownership by announcing the end of the “Golden Visa” program, which granted residency to those investing €500,000 or more in real estate. The new tax proposal represents a further step to address what Sánchez called “one of the main challenges of European and Spanish societies: access to housing.”  

While the proposal has drawn support from those seeking housing reform, it faces opposition from investors and property developers, who warn it could deter foreign investment. With Spain’s economy heavily reliant on tourism and real estate, balancing economic growth with housing affordability remains a complex challenge.  

For now, the proposed tax signals a bold shift in Spain’s approach to housing policy, aiming to reshape the market to prioritize residents over speculative buyers. Whether it will become law remains uncertain, but the debate underscores the urgent need to address Spain’s deepening housing crisis.