Spain proposes 100% tax increase on non-EU property buyers

The Spanish government’s proposal to impose a 100% tax on property purchases by non-EU buyers has been presented to parliament.  If the draft law is approved and goes ahead – it faces obstacles – it will only apply on second-hand property.  

In January 2025, Spanish Prime Minister Pedro Sánchez unveiled a plan of 12 measures aimed at tackling the issue of housing accessibility in Spain.  Now, on 22 May 2025, the government presented its draft legislation was presented to parliament.  It includes the proposed new national tax aimed at discouraging property purchases by non-EU residents.

If approved, this “Complementary State Tax on Real Estate Transfers” would apply only to second-hand property purchases and act as an additional charge on top of the current Transfer Tax (ITP).

This proposal could double the tax cost for non-EU investors buying second-hand property in Spain.

Key points:

• Only individuals and companies not residing in the EU will be affected.
• EU residents – including UK nationals who have a Spain residence permit – are exempt. Business buyers are also exempt if the deal is subject to VAT.
• The tax will only apply to purchases of used properties in Spain. New builds are excluded as they are subject to VAT not ITP.
• The tax rate will be 100% of the value of the property. The ITP transfer tax already paid will be deducted.
• The proposal is part of a broader legislative package, which also includes other fiscal changes such as raising VAT on short-term tourist rentals from 10% to 21%.

Will it go ahead?

This measure is not final. The bill still needs to go through parliamentary debates and amendments, then be approved by the Congress and subsequently by the Senate. Therefore, it is not expected to come into force until at least the second half of the year – if approved at all.

If it is passed, it may face legal challenges at the EU level. Experts argue the measure may violate EU rules on free movement of capital. Similar cases have led to EU court rulings against Spain in the past for discriminatory tax treatment of non-residents.

We will follow developments and provide an update once we have information on how the tax reform will work if it goes ahead.

In the meantime, please do not hesitate to get in touch with Blevins Franks if you would like advice on becoming resident in Spain. We can advise on residence visas as well as the tax implications and effective tax planning in Spain.