Spanish Prime Minister Pedro Sánchez on Monday 13th January 2025 announced that his government intends to dissuade non-resident non-EU nationals from purchasing properties in Spain, as a means of addressing the country’s housing crisis.

If this is passed it will affect Brits buying property in Spain

Sánchez made the announcement as he unveiled a series of measures aimed at solving the problem of spiralling property prices and rents in Spain.

“We have decided that we are going to limit the purchase of properties by non-EU foreigners from outside the EU,” the Socialist leader told the Spanish Congress.

Although more details are yet to emerge about how Spain’s left-wing coalition government would limit them, it appears to be rather a case of dissuading third-country buyers like Brits by taxing them more.

“For them, the tax burden will be up to 100% of the value of the property,” the Spanish Prime Minister said.

It is unclear at this point what this extra fiscal burden will entail, whether property transfer tax, VAT, capital gains or other. But there is the sense that the objective is to make it less financially viable – and/or profitable – for non-resident non-EU nationals such as Brits and Americans to buy a second home in Spain.

At this time we don’t know a time scale for the introduction of the new tax but it will need to be present to the Spanish Congress for approval which could prove to be a challenge to get the changes passed

In 2023 alone, non-EU residents bought 27,000 houses and flats

The idea of limiting third-country nationals who don’t reside in Spain from buying second homes has previously been suggested in regions such as the Canary Islands and the Balearics, where foreigners have bought a high proportion of properties and there is limited space and stock.

According to Idealista, Spain’s main property website, EU legislation makes a total ban on property purchases almost impossible.

The prohibition of all restrictions on the movement of capital between Member States and third countries, which includes the purchase of real estate, means that any EU citizen essentially has the right to purchase property in any member state without significant restrictions.

In 2022, foreigners with a second home in Spain contributed €6.35 billion to Spain’s GDP and generated more than 105,000 jobs in the tourism sector, according to the study “The economic impact of residential tourism in Spain” done for the Spanish Association of Developers and Builders (APCE) by PricewaterhouseCoopers (PwC).

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