Spain is currently considering a significant policy change: a 100% tax on property purchases made by non-EU residents. This proposal, announced by Prime Minister Pedro Sánchez in January 2025, aims to address the nation’s escalating housing crisis by curbing foreign investment, which is believed to drive up property prices and reduce availability for local residents.
Scope of the Proposed Tax
The tax specifically targets non-EU citizens who are not residents of Spain. In Spanish tax law, individuals are considered non-residents if they live in the country for less than 183 days within a calendar year. Therefore, non-EU nationals residing outside Spain would be subject to this tax upon purchasing property in the country. It’s important to note that this measure would not affect citizens from EU member states or non-EU individuals who have established residency in Spain.
In short, this does seem to favour EU nationals – some say unfairly and unwisely. Continued below …
Implications of the Tax
The primary objective of this tax is to deter foreign speculation in the Spanish real estate market, which has been linked to soaring property prices, especially in urban centers like Madrid and Barcelona, as well as popular tourist destinations such as the Costa del Sol. By imposing this tax, the government aims to make housing more accessible and affordable for Spanish citizens.
However, the proposal has sparked debate. Critics argue that non-EU buyers constitute a small fraction of the overall housing market—approximately 27,000 out of 583,000 property transactions in 2023—and that this measure might have a limited impact on the broader housing crisis. Additionally, there are concerns about potential negative effects on local economies that benefit from foreign investment, particularly in regions heavily reliant on tourism. Some experts suggest that the policy could deter not only speculators but also genuine buyers looking to contribute positively to the local community.
Current Status and Next Steps
As of February 2025, the 100% property tax proposal is still under consideration and has not been enacted into law. The Spanish government is conducting a thorough study to finalize the details before presenting it to parliament for approval. Given the political landscape and the need for a parliamentary majority, the outcome remains uncertain.
In the interim, potential non-EU buyers are advised to stay informed about legislative developments and consider their residency status in Spain. Obtaining residency could potentially exempt buyers from the proposed tax, depending on the final stipulations of the law. Consulting with legal professionals familiar with Spanish property law is recommended to navigate this evolving situation effectively.
In summary, while the proposed 100% property tax on non-EU buyers in Spain aims to alleviate housing affordability issues, its implementation and potential impact are still subjects of active discussion and analysis.
If you’re considering buying in Spain, and may be affected by this potential tax hike, get in touch ASAP, and we’ll help you navigate the rules as best we can.
