Overview

• Spain’s Prime Minister Pedro Sánchez has proposed a 100% tax on property purchases by non-EU nationals without residency in an effort to tackle the country’s housing affordability crisis.
• The proposal comes as property prices in Spain have surged by 9% in 2024, with rents in cities like Madrid and Barcelona increasing by over 25% in the past five years.
• Critics argue the measure may not significantly address housing shortages, as foreign speculators represent a small percentage of the market and transaction costs in Spain are already high.
• Foreign demand for Spanish property remains strong, with non-resident buyers, particularly from the UK, Germany, and France, accounting for nearly 20% of home purchases in 2024.
• Similar measures to limit foreign property ownership have been implemented globally, with varying degrees of success, including taxes in Singapore, Canada, and restrictions in Switzerland and Denmark.