Proposals to improve housing accessibility in Spain include tax increases on non-EU property buyers

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20.01.25
Spain 100% tax on non-EU property buyers

Spanish Prime Minister, Pedro Sánchez, unveiled a plan of 12 measures on 13 January 2025, aimed at tackling the issue of housing accessibility in Spain.

Following the abolishment of the golden visa, this new package seeks to expand the availability of affordable housing, regulate the real estate market, and provide long-term solutions to Spain’s housing crisis.

The 12 measures to tackle housing accessibility

At present, these 12 measures are proposals, which were presented verbally by the Prime Minister.   There is a long way to go before we know what will be presented to parliament and eventually turn into law.

The one of most interest to many British people is the possibility of a 100% tax on property purchases, however, the specifics of this proposal remain unclear, and it is not yet known how this tax would be calculated or implemented. Further details are awaited to fully understand its implications.

The measure is aimed at limiting purchases by non-residents, to make housing more available for citizens and legal residents. It would impact UK residents who wish to buy property in Spain as a holiday home or investment, bringing into question how effective this type of investment is.    This tax would not apply to EU citizens, or UK nationals who have legal residence in Spain when purchasing property.

Speaking to an economic forum in Madrid, Sr Sánchez explained that non-EU residents bought 27,000 properties in Spain in 2023, “not to live in” but “to make money from them… Which, in the context of shortage that we are in, [we] obviously cannot allow”.

He did not provide further detail on how the tax would work, and official document on this and the other measures still needs to be released.  It will then be subject to parliamentary approval and is expected to face significant scrutiny and debate.

The 12 key measures are:

1.  Creation of the Public Housing Agency, to focus on building affordable rental social housing.

2.  Priority in the acquisition of properties and land for the Public Housing Agency.

3.  Permanent protection of state-supported housing – a legal guarantee that all housing constructed by the State remains publicly owned indefinitely.

4.  Innovation in construction. A new Strategic Project for Economic Recovery and Transformation will focus on modular and industrialised construction to reduce construction time and costs.

5.  A system of public guarantees to protect landlords and tenants participating in affordable rental programmes (initially for tenants under age 35).

6.  Renovation of vacant properties – financial assistance to landlords who will rent out properties affordably for a minimum of five years.

7.  100% income tax exemption – landlords renting their properties in accordance with the Reference Price Index will benefit from a full exemption from Personal Income Tax (IRPF).

8.  Regulation of tourist properties. This is a proposal to classify tourist properties as a business activity, subjecting them to taxation as such, including VAT, particularly in key areas.

9.  Conditional tax benefits for Real Estate Investment Trusts (SOCIMIS) which promote affordable rental housing.

10. Restrictions on property purchases by non-residents. As explained above, non-EU citizens who do not reside in Spain will face a 100% tax surcharge when purchasing properties, prioritising housing access for residents.

11. Crackdown on seasonal rental fraud.

12. New State Housing Plan for 2026, to serve as a long-term strategy to ensure sustainable housing access.

We will follow developments as these measures are presented and discussed by parliament 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 a resident in Spain. We can advise on residence visas as well as the tax implications and effective tax planning in Spain.

Contact us now.

Tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change. Tax information has been summarised; individuals should seek personalised advice.

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