Estate agents in the UK and Spain who sell Spanish homes to British buyers are up in arms after the country’s PM, Pedro Sánchez (main image, inset) announced that all properties bought by non-EU citizens are to attract a 100% purchase tax.

This would appear to mean that a home bought for £400,000 would cost someone with a British passport and non-resident in Spain, a further £400,000 in tax which would, in effect, massively impact the market for Spanish homes among UK buyers.

Agents and those involved in selling properties to British and other non-EU buyers have called the Spanish PM’s claims that sales of holiday homes and investment properties are contributing to the country’s housing shortage “misleading”.

But Sánchez said the “unprecedented” measure was necessary to meet the country’s housing emergency.
“The West faces a decisive challenge – to not become a society divided into two classes, the rich landlords and poor tenants,” he said.

The PM also claimed that non-EU residents bought 27,000 properties in Spain during 2023 “not to live in” but “to make money from them, which, in the context of shortage that we are in, [we] obviously cannot allow”.

But experts suggest that the proposed tax hike is more political posturing than tangible policy because the Sánchez Government has a slim majority in the Spanish parliament, and that the PM will struggle to persuade many local regional governments to implement the new duty given the economic wrecking ball it would introduce to many areas popular with tourists, holiday home owners and retirees.

Andy Bridge, CEO of TV show-linked property portal APlaceInTheSun.com, says: “The PM referred to 27,000 property sales in 2023 to non-EU buyers as ‘speculative investment’ which is misleading,

“Almost half of these were sales to British buyers with many of them going on to be tax residents and the rest enjoying a holiday home, possibly used by family and friends but not contributing in any significant way to the shortage of affordable housing stock or the Airbnb issue in places like Barcelona.”

Shift of interest

Mauro De Santis Bo, a financial adviser at GSB Wealth adds: “With years of experience helping Britons relocate to Spain, we know how popular it is for its lifestyle and climate. However, Spain’s proposed 100% tax on property purchases by non-EU buyers could shift interest toward alternatives like Portugal, Cyprus, or Greece.

“Also, in response to the Prime Minister’s claim that people are buying for ‘mainly for speculation’, this has not been my experience, instead it’s about creating a home or enjoying retirement. We’ll be monitoring these changes closely to help clients make informed decisions and consider alternative destinations if needed.”