Buying a property in Spain is a dream for many Brits, but new plans proposed by the country’s prime minister this week could force prospective buyers to reconsider.
Spanish Prime Minister Pedro Sanchez announced this week that non-European Union residents buying properties in Spain could be hit by a tax of up to 100 per cent.
Describing the measure as “unprecedented”, the prime minister explained that the tax would stop foreign buyers from purchasing homes that they “would not live in”.
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Further details of the tax are yet to be announced, and there is currently no timeline on when the measures will be presented to parliament for approval.
Malaga, a popular area in Spain among Brits -Credit:Getty Images/iStockphoto
The plans have been met with divided opinion, with some property experts calling the measures “extreme” while others say it will simply drive Brits elsewhere.
Here we take a look at what the property tax hike means, why it’s been announced now and what it means for UK residents hoping to purchase property in Spain.
What are the proposed plans and why have they been announced?
Pedro Sanchez said he plans to introduce a tax hike for people purchasing property who are from outside the EU and do not have residential status in Spain, which could be up to 100 per cent of the value of the property. Currently property taxes in Spain range from around 6 per cent to 10 per cent.
He said that in 2023, non-EU residents bought 27,000 properties in Spain, “not to live in” but “to make money from”. According to the Spanish property registry, a total of 583,000 homes were old in Spain in 2023.
Spain is currently facing a housing crisis with a lack of affordable housing and rising property prices being key issues. It was among the major concerns raised by residents during protests against mass tourism in 2024.
One issue is that a lot of properties are being used as holiday rentals, such as Airbnb, making them unavailable for local residents. However, some areas have introduced measures to combat this, such as temporary bans on new holiday homes being built in Malaga.
A lack of affordable housing has been a concern for residents in Spain and it was one of the main issues among raised during protests in 2024 -Credit:AP
What do experts think of the proposed plans?
Toby Leek, president of property professionals’ body NAEA Propertymark, described the measures as “extreme”. He told the PA news agency that it would likely put Brits off buying property in Spain and that they would instead “consider countries like Cyprus and Greece with lower property tax levels for their dream home move.”
In Majorca, a popular Spanish island among Brits, experts believe that there will be “very limited impact” if the tax measure comes into force. Hans Lenz, president of the ABINI association, and José Miguel Artieda of the API told Majorca Daily Bulletin that these non-EU residents “represent only a very small segment of buyers”.
Alastair Johnson, co-founder of the website Moving to Spain, highlights that it would take a while for the measure to be approved, and realistically it won’t put off those who are seriously considering buying property there.
He told the Manchester Evening News: “At present, it is just a proposal with a lot of consultation before the bill is drafted, let alone tabled and passed. It is a small part of a much wider package to manage the housing affordability crisis in Spain. Given that it only impacts non-residents, this does only affect a small number of homes so it is not the complete answer to the problem.
“Non-EU citizens (Including UK Citizens) are still welcome to move to Spain and buy properties. Just last October, Prime Minister Sanchez advocated for continued immigration, recognising that immigrants would boost the economy, given Spain’s declining birth rates.
“We’ve spoken to several clients and partners, and while this may make some headlines, we don’t feel it is a serious issue for people considering a move to Spain. However, many people in Spain will welcome measures to address the concerns and frustrations that led to the anti-tourism protests over the summer.”
What are the tax rates in other countries?
Many property experts reckon that the plans could put Brits off purchasing in Spain and that they will look elsewhere instead. Here’s an idea of the taxes you would pay when buying property in other popular European countries.
In France, taxes and transfer of ownership comes in at around seven to 10 per cent on properties older than five years. If the property is newer than this, it comes in at around two to three per cent.
In Portugal, taxes vary from five per cent to around 9 per cent, depending on various factors. In Italy taxes depend on several factors, such as if it’s a first or second home, with rates varying from 2 per cent to nine per cent.
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