Stress on Spain’s housing market has been exacerbated by overtourism and the proliferation of short-term vacation leases.
Spain is planning to introduce a 100 per cent tax on properties purchased by non-EU residents in its newest transfer to guard the housing market from international patrons.
Spanish Prime Minister Pedro Sanchez mentioned the “unprecedented” new tax was wanted to unravel the nation’s housing disaster. In recent times, rents have skyrocketed in Airbnb-dominated cities like Barcelona and Madrid and folks’s incomes have didn’t sustain.
Stress on Spain’s housing market has been exacerbated by overtourism and the proliferation of short-term vacation leases. The nation’s Tourism Ministry has simply introduced {that a} file 94 million worldwidetravellers visited Spainin 2024, one of the best 12 months for tourism within the nation since data began.
As upset over overtourism grows, the federal government has been pushed into motion in an try to unravel the housing disaster.
How will Spain’s property tax have an effect on international patrons?
Non-EU residents purchased 27,000 properties “to not reside in” however “to earn a living from” in 2023, Sanchez mentioned. Gross sales of properties to foreigners, together with EU residents, make up roughly 15 per cent of the housing market in accordance with the Spanish property registry.
The transfer, Sanchez mentioned, is designed to prioritise properties for residents.
The brand new tax gained’t make it unimaginable for non-EU residents to purchase properties however will seemingly imply it isn’t financially viable for a lot of contemplating buying a property within the nation. Sánchez additionally didn’t present a timeline or particulars on how he plans to implement the tax.
The brand new tax gained’t have an effect on EU residents as a consequence of Spain’s obligations as a member of the bloc. And, if you happen to already personal a property within the nation, you seemingly gained’t be impacted by the brand new coverage. It may well’t be taken from you however the authorities may add further capital positive aspects taxes sooner or later.
Spain tackles tourism to unravel housing disaster
Spain has already been cracking down on tourism in response to the housing disaster with some cities trying to ban Airbnb-style leases completely.
In June final 12 months, Barcelona Metropolis Council introduced a plan to rid the town of vacationer flat licenses by 2028. The town hasn’t really granted any new licenses since 2014 when it froze the availability at round 10,000 items.
Rental costs have been pushed up, partly, due to these short-term contracts primarily supplied to vacationers. Different measures proposed by the federal government embody larger taxes on these vacation leases.
Residents of Barcelona have organised protests in opposition to overtourism, with round 3,000 individuals taking to the streets in July final 12 months shouting “vacationers go residence” and spraying them with water.
Protests have additionally taken place within the Balearics and Canary Islands. Additional actions in opposition to excessive rents in November – although much less particularly focused at vacationers – additionally recognized overtourism as a driver.
Rental costs have been pushed up, partly, due to these short-term contracts primarily supplied to vacationers.
At first of this 12 months, Spain made strikes to axe its golden visa programme by April. An funding of €500,000 into actual property affords rich foreigners the possibility to achieve residency and reside, work and examine within the nation. Residency in Spain additionally grants you the proper to visa-free journey throughout the Schengen Space, which incorporates many of the EU, making this an much more interesting provide.
Like elsewhere in Europe, this scheme has been considerably too profitable driving up property costs in metropolis centres like Barcelona and making housing unaffordable for a lot of native residents.