Spain has announced plans to impose a 100 per cent property tax on non-EU citizens buying homes in the country, in a move that could affect British households hoping to become expats.
Yesterday, Prime Minister Pedro Sánchez unveiled the controversial proposal yesterday as part of a 12-point package aimed at tackling the European Union (EU) country’s housing crisis.
This new levy would mean non-EU citizens without legal residence in Spain would need to pay taxes equivalent to the full value of any property they purchase. The “unprecedented” measure is designed to deter foreign nationals from purchasing second homes on the Costas and other parts of the country.
Currently, house-buyers in Spain pay between 10 and 12 per cent of the property’s value in costs and taxes, depending on location. The proposal will need parliamentary approval to become law, though Sánchez’s minority government often struggles to pass legislation.
Official figures show the number of British citizens registered as living in Spain has increased since Brexit, rising from 276,089 in 2017 to 284,037 in 2023. The new tax proposal comes amid declining British property purchases in Spain.
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Spain’s Prime Minister has confirmed plans to charge non-residents looking to buy property a 100 per cent tax charge
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Some 12,470 sales to UK buyers were recorded in 2023, marking a 16.5 per cent decrease from the previous year. Sánchez said the tax would specifically target non-EU citizens who don’t already live in Spain, suggesting current British residents would not be affected.
“We are going to limit the purchase of houses by non-resident non-EU foreigners,” the Spanish Prime Minister said. One in five homes sold in Spain is currently purchased by foreigners, many of whom are non-residents.
The tax would dramatically increase costs for British buyers, who currently pay between 10 to 12 per cent of the property’s value in taxes and fees. Sánchez accused foreign buyers of purchasing properties for speculation rather than residence, pointing to 27,000 homes bought by non-EU nationals in 2023.
“Non-residents bought 27,000 houses last year, mainly for speculation,” he said during the announcement in Madrid. The Prime Minister emphasised that the Government’s duty is to prioritise housing for residents over speculative purchases.
Non-EU property
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“It isn’t fair that those who have three, four or five apartments as short-term rentals pay less tax than hotels or workers,” Sánchez said at a housing forum at Madrid’s Railway Museum.
He noted that average house prices in Europe have risen by 48 per cent in the last decade, calling the situation “unbearable.” The Spanish leader said the new measures would help “prioritise the availability of housing for residents.”
The tax proposal is part of broader housing reforms, including plans to raise taxes on holiday rentals to match business rates. Spain also announced it will end its “golden visa” scheme on April 3 this year, which currently allows non-EU citizens to gain residency by investing €500,000 (£420,000) in Spanish property.
The government will promote social housing construction and provide two million square metres of residential land to a new public housing agency. Landlords in high-rent areas who keep their rents aligned with official price indexes will receive a 100 per cent tax exemption on that income.
The Bank of Spain has previously recommended intervention in the rental market, warning of “adverse economic and social effects” from high rents. The measures come as Spanish cities grapple with soaring rents due to gentrification and landlords shifting to more lucrative tourist rentals.
Last month, authorities launched an investigation into Airbnb for failing to remove thousands of misleading rental offers from its platform. Anti-tourism protests have erupted across Spain in recent months, with large demonstrations in Majorca, Tenerife and Malaga over housing affordability concerns.
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Britons are being warned about a potential hiked property tax which could ruin their expat dreams
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In Barcelona, mayor Jaume Collboni has announced plans to end all short-term tourist lets within five years. The mayor confirmed he will not renew any of the 10,101 tourist licences when they expire in November 2028.
The properties, currently listed on platforms like Airbnb and Homeaway, will be made available to local residents instead. Barcelona has seen dramatic price increases, with rents rising 68% in the past decade and house prices climbing 38 per cent.
Collboni said these increases have made it impossible for many locals to afford apartments in their own city.
Following Brexit, British homeowners in Spain can only spend 90 days in every 180-day period at their properties unless registered as tax residents.
