Britons hoping to buy their dream house in Spain will face a 100% tax as part of new plans proposed by the government.
All non-EU residents will face the tax on real-estate purchases, part of a bill that officials say will help ease Spain’s housing crunch.
This means that a Briton buying a €300,000 villa will have to cough up €600,000 instead.
EU citizens, including Germans, who are second to Britons as the highest number of foreign buyers in Spain, will be exempt.
Prime Minister Pedro Sánchez’s Socialist party submitted the bill to parliament last week to promote ‘measures that enable access to housing, since we are facing one of the largest problems our society is currently confronted with’, according to a draft of the bill seen by Bloomberg.
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Spain is running out of affordable homes, especially in major cities like Madrid and Barcelona.
Rents have been rising for years amid gentrification, a decline in housing construction and landlords snapping up homes for short-term tourist rentals, like on Airbnb.
Some 412,000 Britons call Spain home, according to 2022 figures.
But the number has only increased since. Britons bought 12,470 Spanish properties in 2023, 30% more than Germans, with 9,611 purchases.
Spain’s cost of living and property prices are lower than the UK, with the country having several British expat communities like Málaga and Alicante.
Hundreds of thousands of people marched in 40 Spanish cities to protest against the rent hikes and lack of cheap homes in April, rattling keys and holding up high flags with the Monopoly man on them.
They chanted: ‘Housing is a right, not a business.’
Sánchez in January described the lack of housing as one ‘of the main challenges facing European societies, including Spain’.
He outlined 12 ‘forceful and unprecedented’ measures to offer more housing, better support buyers and more tightly regulate the market, including the 100% tax.
The measures also include tax breaks for landlords who lower rents and plans to build low-cost housing. The legislation, if passed, would increase VAT on short-term rentals and hike taxes on publicly-listed real estate investment trusts.
Foreign business workers or professional workers based in Spain will not be affected.
Last year, the average cost of renting a flat in Spain was €984 per month, up from €553 in 2014, a 78% increase.
The highest rent increase has been seen in the Balearic Islands, known for their blue-green waters, with a 158% rise over the past decade.
Sánchez, speaking at an event in Madrid called ‘Housing, fifth pillar of the welfare state’, stressed that housing in Europe is ‘unfair’.
‘The West faces a decisive challenge if it wants to avoid becoming a society divided into two classes,’ he added, ‘rich landlords and poor tenants.’
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