Spain ’s government is grappling with a deepening housing affordability crisis and it has proposed targeting foreign buyers as a potential solution. However, experts are skeptical that these measures will meaningfully impact the housing shortage or curb rising costs. Prime Minister Pedro Sánchez recently announced a proposal to impose a 100% tax on residential properties purchased by non-EU citizens who don’t reside in Spain.
He also suggested increasing taxes on short-term rentals. Just a week later, Sánchez floated the idea of a complete ban on property purchases by non-resident non-EU nationals. This potential ban would impact citizens of countries like the UK and the US looking to buy holiday homes in Spain.
While the proposals aim to address the housing crunch, it remains unclear whether they will be effective. Experts suggest that focusing on increasing the overall housing supply would be a more impactful approach. These proposals come at a time when Spain’s housing market is under intense pressure in certain locations.
While the economy is growing and unemployment is falling, demand for housing is increasing, especially in cities like Madrid and Barcelona. However, potential buyers and renters are facing a severe shortage of available homes, and those that are available are often priced out of reach for average salaries. In popular coastal areas, short-term rentals and second homes are also pushing up prices and displacing locals from the market.
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