In efforts to battle Spain’s “unprecedented” housing emergency, Prime Minister Pedro Sánchez has announced a tax of up to 100% on property purchased by residents from non-EU countries such as the UK.
“The West faces a decisive challenge: To not become a society divided into two classes, the rich landlords and poor tenants,” he said.
Sánchez’s announcement sought to underline the international scope of the crisis, citing housing prices had increased 48% in the past decade across Europe, growing significantly faster than household incomes.
“Just to give an idea, in 2023 alone non-European Union residents bought around 27,000 houses and flats in Spain. And they didn’t do it to live in them, they didn’t do it for their families to have a place to live, they did it to speculate, to make money from them, which we – in the context of shortage that we are in – obviously cannot allow.”
The move was therefore designed to “priorit[ise] that the available homes are for residents”, he said.
Currently, rates vary by region, with the total tax bill being anywhere between 7 and 12 percent of the property value. The new proposed legislation would be introduced either by modified stamp duty or via a special tax.
Details on a timeline or how the tax would work were not shared. But his government said the proposal would be completed “after careful study”. In order to become law, the bill would need to be approved by parliament.
It’s one of many proposed plans by the Prime Minister announced on Monday aimed at improving housing affordability in the country as anger amongst nationals rises.
Other measures announced include a tax exemption for landlords who provide affordable housing, transferring more than 3,000 homes to a new public housing body, and tighter regulation and higher taxes on tourist flats.
In Spain only 2.5% of housing is set aside for social housing, a statistic that trails behind other EU countries such as France and the Netherlands.
“We are facing a serious problem, with enormous social and economic implications, which requires a decisive response from society as a whole, with public institutions at the forefront,” Sánchez added.