Spain‘s Prime Minister Pedro Sánchez has announced an unprecedented measure aimed at tackling the country’s housing crisis. The measure? A 100% tax on real estate properties purchased by non-EU residents from countries outside the European Union, such as the UK.
But why 100% tax on real estate? Well, the aim of this ridiculous tax is to tackle the country’s housing crisis. Sánchez argues that this drastic step is necessary to address the growing divide between wealthy landlords and struggling tenants.
Sánchez wanted to emphasize the global nature of the challenge, citing housing prices that had increased 48% in the past decade across Europe, far surpassing household incomes.
He told an economic forum in Madrid: “The west faces a decisive challenge: to not become a society divided into two classes, the rich landlords and poor tenants.”
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The unprecedented measures also include expanding the supply of social housing, offering incentives to those who renovate and rent out empty properties at affordable prices, and cracking down on seasonal rentals. He added that in Spain, just 2.5% of housing is set aside for social housing, a figure that lags drastically behind that of countries such as France and the Netherlands.
However, there’s more to this than meets the eye. This isn’t just about taxing foreign buyers. It’s about prioritizing housing for Spanish residents. Sánchez pointed out that in 2023 alone, non-EU residents snapped up 27,000 properties, not to live in, but to make money from them. And in a country facing a severe housing shortage, that’s simply unacceptable.
Spain has long been a popular destination for non-EU holiday home buyers, with residents of the UK, US and Morocco gathering to buy properties in places such as Barcelona, Marbella and Ibiza.
And let’s not forget the impact of short-term rentals. Platforms like Airbnb have turned residential areas into tourist hotspots, driving up prices and pushing out long-term residents. Sánchez’s plan includes higher taxes on these short-term rentals, aiming to level the playing field between tourist apartments and hotels.
Sánchez said the proposal would be sent to parliament. However, he did not offer more details on how the plan would work or when it would be finalized.
Critics argue that this 100% tax could deter foreign investment and create uncertainty in the market. Antonio de la Fuente, managing director at Colliers, called the plan ‘a drop in the ocean’ and warned that it could scare off both individual and institutional investors.”
Sánchez’s proposal still needs to pass through parliament, where he has often struggled to gather enough support for his initiatives. So, will this bold move become law, or will it be another ambitious plan that falls by the wayside?”
What do you think? Is this a necessary step to protect Spanish residents, or a misguided attempt that could do more harm than good? Share your thoughts in the comments below, and don’t forget to like, share, and subscribe for more updates.
