Spain is planning a radical fix for its housing crisis: A 100% tax on non-EU buyers
AP Photo/Rafiq Maqbool
- Spain wants to put a 100% tax on homebuyers on foreign buyers.
- Its prime minister said too many were buying Spanish property as investments rather than homes.
- Spain faced some of Europe's largest housing price hikes in 2024.
Spain plans to put a 100% tax on homebuyers from overseas in an effort to tackle the country's housing crisis.
Prime Minister Pedro Sánchez announced the measure in a Monday speech at a housing forum in Madrid.
He said that too many foreign buyers saw Spanish property as investment vehicles and were buying homes for financial gain rather than to live in.
He said he would push for legislation to enact the new tax, effectively doubling property prices for non-EU buyers. The move would require the approval of Spanish lawmakers.
That would include US citizens, as well as people from the UK, where Spain is a popular retirement destination.
According to Spain's Association of Registrars, foreigners bought 24,700 properties in Spain in the third quarter of 2024, accounting for 15% of all real estate purchases in the country.
That figure did not differentiate between EU and non-EU foreign buyers.
Sánchez said the present situation was "absolutely unbearable" and an "emergency."
"Our homes cannot serve as a financial asset or a bank deposit," he said.
Sánchez pointed to recent laws in Canada as precedents — two provinces there charge 20-25% extra to foreign buyers.
Spain's housing market faced some of Europe's largest price hikes last year.
Home prices increased by 8.3% year-on-year in the last quarter of 2024, per Eurostat. The EU average was 3.8%.
According to research from Spain's Caixa Bank, new homes saw the sharpest price increase, with a 10.7% increase year over year in the first half of 2024.
Sánchez said the most significant factor in this rise was people using housing as an investment vehicle — though he also cited factors like population growth, land scarcity, rising construction costs, and restricted access to mortgages.
He said the "unprecedented" 100% tax would narrow a gap between "wealthy landlords" and "poor tenants," pointing to data showing Europe's average house prices rose 48% in the last decade — almost twice as much as disposable income.
"Spain's housing should be for Spanish people to live in, as well as for migrants who come here to work and build a life and contribute to the development and prosperity of our country," he added.
Sánchez didn't offer details on how the tax would work or a timeline for getting a law passed by Spain's legislature.
Spain's government didn't immediately reply to a request for comment from Business Insider.