Spain’s PM Proposes 100% Tax on Home Purchases by Non-Resident Foreigners

In a bold move to address Spain’s housing crisis, Prime Minister Pedro Sánchez has proposed a 100% tax on the purchase of homes by non-EU foreigners who do not reside in the country. The measure, announced on Monday at an economic forum in Madrid, aims to curb speculative property purchases and prioritize housing availability for residents.

Sánchez described the initiative as “unprecedented” for Spain but noted that similar policies are already in place in countries like Canada and Denmark. The proposed tax would apply to the full value of properties purchased by non-resident, non-EU buyers, discouraging what Sánchez referred to as the “speculative, touristic use of properties.”

“In 2023 alone, non-EU residents purchased approximately 27,000 homes in Spain, often not to live in them or house their relatives, but primarily as speculative investments,” Sánchez stated. He emphasized that such practices exacerbate the housing shortage, making it difficult for Spanish citizens to access affordable housing.

The Prime Minister stressed that while Spain remains open to foreign investment, it must be “productive” and not contribute to residential scarcity or inflated property prices.

This tax proposal is part of a broader set of measures to combat Spain’s housing challenges, which include increasing public housing stock and tightening regulations on short-term rentals.

The plan has sparked significant debate among stakeholders, with proponents arguing it will alleviate pressure on the housing market, while critics warn it could deter foreign investment and impact property values.

As the proposal moves forward, it underscores Sánchez’s commitment to tackling housing inequality and ensuring that Spain’s real estate market serves the needs of its residents first.