Spain’s Prime Minister, Pedro Sánchez, has unveiled a proposal to impose a tax of up to 100% on real estate purchases by non-EU residents, aiming to address the country’s worsening housing crisis. The measure, announced Monday, is part of a broader initiative to curb rising housing costs and alleviate public anger over affordability issues.
“The west faces a decisive challenge: to not become a society divided into two classes, the rich landlords and poor tenants,” Sánchez said at an economic forum in Madrid. He highlighted that housing prices in Europe have risen 48% over the past decade, far outpacing household incomes.
The proposed tax targets non-European Union buyers, including those from the UK, the US, and Morocco, who have long been drawn to Spanish hotspots such as Ibiza, Marbella, and Barcelona. In 2023 alone, non-EU residents purchased approximately 27,000 homes in Spain, often as investments rather than residences.
“They didn’t do it to live in them… they did it to speculate, to make money from them, which we – in the context of shortage that we are in – obviously cannot allow,” Sánchez stated. He described the proposed tax as “unprecedented” in Spanish history but did not provide details on its implementation or timeline for parliamentary approval.
The measure is one of several aimed at expanding access to housing. Other initiatives include increasing the supply of social housing, incentivizing the renovation and rental of empty properties at affordable rates, and tightening regulations on seasonal rentals. Sánchez noted that only 2.5% of housing in Spain is allocated for social housing, far behind countries like France and the Netherlands.
Tourist flats, frequently blamed for driving up rents and reducing housing availability for locals, will also face stricter regulations and higher taxes. Sánchez argued that it is unfair for owners of multiple short-term rental properties to pay less tax than hotels.
While Sánchez’s proposals have captured international attention, some analysts are skeptical of their viability. With his government’s history of struggling to pass legislation, one expert told the Financial Times that the proposal might be more about deterring foreign investors through “uncertainty and noise” than enacting actual change.
The housing crisis remains a critical challenge for Spain, and Sánchez’s measures reflect growing pressure to address affordability and protect local communities from speculative practices in the property market.
