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In an attempt address Spain's mounting housing crisis, Prime Minister Pedro Sánchez has announced sweeping reforms aimed at limiting foreign property speculation and protecting local residents' access to affordable housing. The most striking measure is a proposed 100% tax on property purchases by non-EU citizens without Spanish residency, effectively doubling the cost for British buyers and other non-EU nationals.
The reforms come in response to alarming statistics showing that non-resident foreign buyers acquired 27,000 Spanish properties in 2023 alone, primarily for speculation rather than residence. "In the context of the shortages we are experiencing, we cannot afford this," Sánchez stated during the announcement of his 12-point reform package.
Currently, property buyers in Spain pay between 10-12% in taxes and costs, depending on the region. The dramatic increase to 100% for non-resident foreign buyers represents an unprecedented attempt to prioritize housing availability for local residents over international investment.
The government's comprehensive plan includes establishing a new Public Housing Company, which will immediately incorporate 13,000 homes from Sareb (Spain's "bad bank"), with plans to add 17,000 more within six months. Additionally, the government aims to mobilize €6 billion in loans and guarantees to construct 25,000 new affordable homes.
The reforms also target the tourist rental market, with Sánchez pledging to tax holiday apartments "as what they are, a business." This follows Barcelona's landmark decision to ban short-term tourist rentals entirely from November 2028, addressing residents' concerns about being priced out of their neighborhoods.
Recent data underscores the urgency of these measures. In major cities like Barcelona and Madrid, rents surged by 18% in June 2024 compared to the previous year. The impact of tourism on housing availability is particularly evident in the 30% increase in visitors choosing rental apartments over hotels during the first half of 2024.
These reforms reflect growing tensions between tourism, foreign investment, and local housing needs. As Sánchez emphasized, "The objective is clear – we want to protect citizens and find a better balance between tourism and investment, which are two key activities for our economy, and access to housing, which is a constitutional right."
