The Spanish government is advancing plans to impose a 100% sales tax on property purchases by non-resident, non-EU citizens – a dramatic proposal that could significantly impact British and American buyers in the country’s popular second-home markets.
The proposed tax, which would double the purchase cost for foreign non-residents, forms part of a broader national strategy to rein in surging property prices.
Housing affordability has become a major political issue in Spain, particularly in regions such as the Balearic Islands, the Costa del Sol, and major urban centres where foreign demand has contributed to pricing out local residents.
The Majorca Daily Bulletin reported last week that draft legislation was tabled in parliament by Prime Minister Pedro Sánchez, who described the housing crisis as “one of the most urgent social challenges” facing Spain.
PRIORITISE ACCESS
The bill’s stated aim is to prioritise access to housing for Spanish citizens by discouraging speculative foreign investment in residential real estate.
Although Sánchez lacks an outright majority in parliament, industry experts caution that even the discussion of such a drastic measure may already be dampening overseas interest.
“The risk is not just the law itself,” said one Madrid-based property analyst, “but the uncertainty it creates for buyers.”
British buyers, in particular, have been a major force in Spain’s property market since the 1990s, with tens of thousands owning second homes across the country.
HOLIDAY RENTALS
Many purchase properties to use during the winter months or as holiday rentals.
But following Brexit, UK nationals are now classed as third-country nationals, leaving them especially exposed under the proposed rules.
Legal experts note that the focus on non-EU citizens is strategic: targeting EU nationals would likely contravene the bloc’s freedom of movement and capital laws. However, critics warn that the measure could violate international investment treaties if enacted.
In Mallorca, where foreign residents – primarily Germans – make up a significant share of homebuyers, property sales have already shown signs of cooling.
Local agents say the proposed tax could exacerbate the slowdown and damage the island’s economy, which relies heavily on tourism and international investment.
