Spain plans to impose a tax of up to 100 percent on the price. Properties purchased by non-residents from countries outside the EU such as the UK.
In announcing the move, Prime Minister Pedro Sánchez said the “unprecedented” move was necessary to tackle the country’s housing emergency.
“The West faces a decisive challenge: not to become a society divided into two classes, the rich landlord and the poor tenant,” he said.
Non-EU residents bought 27,000 properties in Spain in 2023, he told an economic forum in Madrid, “not to live in” but “to make money from them”.
“Which, in the context of scarcity in which we are, [we] Obviously cannot allow,” he added.
The Spanish prime minister said the move was designed to prioritize affordable housing for residents.
Sánchez did not provide further details on how the tax would work or a timeline for submitting it to parliament for approval, where it is often necessary to muster enough votes for legislation. Have been struggling.
His office described the proposed move as a way to limit the purchase of homes by “non-resident non-EU foreigners”. In Spain, people are classified as non-resident if they Stay in the country for less than 183 days in a year.
He added: “The tax burden they will have to pay in case of purchase will be increased to 100% of the property value as per countries like Denmark and Canada.”
Currently non-residents can be expected to pay 6-10% tax on the property value depending on the area and if the property is new or not.
The Spanish government said the proposal would be finalized “after careful study”.
Potential British buyers told BBC News that the proposal had made them rethink buying in Spain.
Michael Hayes, from Manchester, who house-hunted south of Alicante at the weekend, wanted a property for family to visit and spend time in his retirement.
“We might consider buying faster before taxes come in, but we don’t know what the future holds,” he said.
“Selling can be difficult if we can no longer sell to non-residents, particularly a holiday home property in a tourist area.”
The 59-year-old said she sympathized with their housing problem, but said she wanted to boost the local economy and asked: “How many working Spanish people want to live in holiday homes in these tourist areas anyway? “
Martin Craven, from London, said he wanted to buy in Spain this year.
“I certainly wouldn’t consider trying to get in before that tax, because who knows what else they could do, a retroactive tax or a tax on current owners,” the 62-year-old said.
“I’ll be looking at Cyprus now instead.”
Julian, 54, from Surrey, said Spain was his first choice to buy a holiday home, but now it “seems more risky” than other countries.
“I want to live there four to six months a year, travel, spend money, buy food, pay taxes,” the 54-year-old said.
“Here in the UK, we also have problems with landlords buying multiple properties and running the rest, but this policy is losing sight of those of us who want to spend money in the country.”
It is one of a dozen planned measures announced by the Spanish prime minister on Monday aimed at improving housing affordability in the country.
Other measures announced include tax breaks for landlords providing affordable housing, the transfer of more than 3,000 homes to a new public housing body, and stricter regulations and higher taxes on tourist flats.
“It’s not fair that those who have three, four or five apartments as short-term rentals pay less tax than hotels,” Sanchez said.