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 resolve the nation’s housing disaster. In recent times, rents have skyrocketed in Airbnb-dominated cities like Barcelona and Madrid and other people’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} report 94 million worldwidetravellers visited Spainin 2024, the most effective 12 months for tourism within the nation since information began.
As upset over overtourism grows, the federal government has been pushed into motion in an try to resolve the housing disaster.
How will Spain’s property tax have an effect on international patrons?
Non-EU residents purchased 27,000 properties “to not dwell in” however “to make cash from” in 2023, Sanchez mentioned. Gross sales of houses to foreigners, together with EU residents, make up roughly 15 per cent of the housing market in keeping with the Spanish property registry.
The transfer, Sanchez mentioned, is designed to prioritise houses for residents.
The brand new tax gained’t make it inconceivable for non-EU residents to purchase houses however will probably 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, for those who already personal a property within the nation, you probably gained’t be impacted by the brand new coverage. It might’t be taken from you however the authorities may add further capital good points taxes sooner or later.
Spain tackles tourism to resolve housing disaster
Spain has already been cracking down on tourism in response to the housing disaster with some cities seeking to ban Airbnb-style leases completely.
In June final 12 months, Barcelona Metropolis Council introduced a plan to rid town of vacationer flat licenses by 2028. 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 provided to vacationers. Different measures proposed by the federal government embrace increased taxes on these vacation leases.
Residents of Barcelona have organised protests towards overtourism, with round 3,000 folks taking to the streets in July final 12 months shouting “vacationers go dwelling” and spraying them with water.
Protests have additionally taken place within the Balearics and Canary Islands. Additional actions towards 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 provided to vacationers.
Originally of this 12 months, Spain made strikes to axe its golden visa programme by April. An funding of €500,000 into actual property presents rich foreigners the prospect to realize residency and dwell, work and examine within the nation. Residency in Spain additionally grants you the proper to visa-free journey inside 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.
