Spain scares off foreign property buyers with new tax threat |
Spain's real estate market is experiencing a major boom. In the first nine months of 2024, property prices rose by an average of 9%, according to the House Price Index from the INE statistics agency.
Average prices have doubled over the past decade, marking a much-welcome recovery following the banking and real estate collapse during the 2008/9 financial crisis. That downturn was fueled by years of overbuilding and property speculation, ultimately forcing Spain to seek a €100 billion ($103 billion) bailout from the European Union to stabilize its banking sector.
The current surge in home prices and rents has reignited concerns over housing affordability. A report last July by real estate platform Idealista revealed that rents in Madrid and Barcelona soared by 25% and 33% respectively over the past five years.
The issue has become politically charged, triggering public unrest and mass protests across Spain's major cities.
In response, Prime Minister Pedro Sanchez has proposed a controversial measure: a 100% tax on property purchases by non-EU nationals without residency in Spain. Sanchez argues that this policy would curb speculation in the real estate market.
However, critics have questioned whether the measure will address Spain's housing shortage or improve affordability for locals as speculators make up a small proportion of buyers.
Mark Stücklin, who runs the Spanish Property Insight website, says there are "no speculators in the Spanish property market." Citing........