Spain’s housing market has faced increased pressure due to overtourism and the rise in short-term holiday rentals. The country has experienced a record number of international travelers in recent years, leading to a housing crisis as rents soar in cities like Barcelona and Madrid. To address this issue, the Spanish government has announced plans to introduce a 100% tax on properties purchased by non-EU residents. Prime Minister Pedro Sanchez stated that this tax is necessary to prioritize housing for residents, as non-EU residents have been buying properties primarily for investment purposes. While details of the tax implementation have not been provided, it is expected to make buying property in Spain less financially viable for many foreign buyers.
The new tax on properties purchased by non-EU residents will not impact EU residents or those who already own property in Spain. However, it is part of a larger effort by the government to address the housing crisis exacerbated by overtourism. Barcelona City Council, for example, has announced plans to eliminate tourist flat licenses by 2028 in an effort to curb the impact of short-term holiday rentals on rental prices. Protests against overtourism have taken place in cities like Barcelona, the Balearics, and the Canary Islands, with residents expressing frustration over rising rents and housing unaffordability. The government has also proposed higher taxes on holiday rentals as part of its efforts to combat the housing crisis.
In addition to the new tax on non-EU property buyers, Spain has also moved to axe its golden visa program, which allowed wealthy foreigners to gain residency through a €500,000 investment in real estate. This program has contributed to rising property prices in cities like Barcelona, making housing unaffordable for many local residents. The residency offered through the golden visa program also provided visa-free travel within the Schengen Area, further increasing its appeal to foreign investors. By ending this program, Spain aims to alleviate some of the pressure on the housing market and prioritize housing for residents over foreign investors.
The Spanish government’s decision to introduce a 100% tax on properties bought by non-EU residents is a significant step in addressing the country’s housing crisis. Non-EU residents have been buying properties primarily for investment purposes, contributing to rising rents in cities like Barcelona and Madrid. By implementing this tax, the government aims to prioritize housing for residents and make buying property in Spain less financially viable for foreign buyers. The tax is part of a larger effort to combat overtourism and the proliferation of short-term holiday rentals, which have driven up rental prices and made housing unaffordable for many local residents.
While the new tax on non-EU property buyers will not impact EU residents or current property owners in Spain, it is part of a broader strategy to address the housing crisis. Barcelona City Council’s plan to eliminate tourist flat licenses by 2028 and proposed higher taxes on holiday rentals are additional measures being taken to curb the impact of overtourism on rental prices. Residents have expressed frustration over rising rents and housing unaffordability, leading to protests in various cities. By ending the golden visa program, Spain also aims to reduce pressure on the housing market caused by foreign investors, particularly in city centers like Barcelona.
In conclusion, Spain’s housing market faces challenges due to overtourism, short-term holiday rentals, and foreign investment. The government’s decision to introduce a tax on properties purchased by non-EU residents, along with other measures such as the elimination of the golden visa program and proposed higher taxes on holiday rentals, is part of a larger effort to combat the housing crisis. By prioritizing housing for residents and addressing the impact of overtourism on rental prices, Spain aims to create a more sustainable and affordable housing market for its citizens.
