Experts warn that Spain’s new property tax could push British buyers to seek homes elsewhere
Madrid: Spain’s new plan to hike property prices is a real kick in the teeth for British buyers. Experts say it might send them looking for homes in other countries.
Prime Minister Pedro Sanchez is pushing for a whopping 100% tax on properties bought by non-EU residents. This move aims to tackle Spain’s housing crisis.
One expert called this tax hike “quite extreme,” even if Spain is trying to help its citizens. It’s a tough situation, but they’re trying to address their housing emergency.
Toby Leek, from NAEA Propertymark, mentioned that many Brits might feel disheartened. For some, moving to Spain has been a lifelong dream, thanks to its sunny weather and great location.
He added that this tax could push Brits to consider other countries like Cyprus or Greece, where property taxes are lower. It’s a big decision for many.
Sanchez said the goal is to create “more housing, better regulation, and greater aid.” In 2023, non-EU residents bought 27,000 properties in Spain, often for investment rather than living.
Like the UK, Spain is facing rising housing costs. Major cities like Barcelona and Madrid are seeing high rents, and house prices are climbing too. Tourism and short-term rentals are making things worse.
Seila Sanches Lucas, a lawyer who helps clients buy property in Spain, said this proposal is worrying for those already living there or thinking about retiring in the sun.
She noted that it’s just a proposal for now and might not even become law. If it does, the process in Spain can be slow, so there’s no need for UK nationals to panic just yet.
She also mentioned that other countries are eager to attract wealthy retirees and investors. Dubai, for instance, is being called the “new Marbella.”
Isobel Neilson, a director at a law firm, said if the 100% tax goes through, many clients might choose to rent instead of buy or look at friendlier EU countries like Portugal or Italy.
Stephen Abletshauser from Spencer West LLP warned that this move could backfire on the Spanish government. Countries like Turkey, Italy, and Malta might benefit from this decision.
Sarah Coles from Hargreaves Lansdown pointed out that current homeowners in Spain might see their property values drop. The aim is to make homes more affordable, which could hurt resale prices.
She added that people might rush to sell before the tax kicks in, potentially driving prices down even before it’s officially introduced.
Richard Donnell from Zoopla noted that over 100,000 Brits are living in Spain on their state pensions, a number that hasn’t changed much in recent years.
He mentioned that it’s unclear who the proposed tax targets, but it seems aimed more at investors than homeowners. The UK has also raised taxes for overseas buyers in recent years.
Kate Everett-Allen from Knight Frank said details about the proposals are still vague. She pointed out that restrictions on foreign buyers aren’t new; many countries have implemented similar measures.
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