Spain announces bold housing reforms targeting non-EU property buyers

Spanish Prime Minister Pedro Sánchez has introduced a set of sweeping measures aimed at alleviating the country’s housing crisis, including a hefty tax—potentially up to 100%—on property purchases by non-European Union residents.

“We are seeing too many homes converted into Airbnbs while our primary issue is a lack of housing,” Sánchez remarked during an event in Madrid.

He pointed out that in 2023 alone, approximately 27,000 homes and apartments were purchased by non-EU individuals, often for speculative purposes rather than residential use. “In the midst of a housing shortage, this trend is simply unsustainable,” he added.

The plan also proposes higher taxation for short-term rental properties, classifying them as commercial ventures to ensure they are taxed accordingly.

The rapid increase in tourist accommodations, particularly in coastal areas and cities like Madrid and Barcelona, has significantly restricted housing availability for local residents. Despite the urgency, the initiative has drawn criticism.

Real estate firm Gilmar argued that the proposed measures lack clarity and claimed that the types of properties purchased by foreign investors do not align with the needs of the general housing market.

“This move feels more symbolic than practical and is unlikely to yield significant results,” the firm stated.

Undeterred by these concerns, Sánchez’s administration is pressing ahead with plans to expand housing availability. The government intends to repurpose 3,300 public properties and utilize 2 million square meters of public land for new housing projects.

However, the proposal could face significant political challenges, as the coalition government has yet to secure the necessary votes in parliament to pass the 2025 budget.

Coalition partner Sumar has expressed cautious support for the initiative but emphasized the need for broader solutions.

“This is a step in the right direction, but more comprehensive measures are required,” commented Ernest Urtasun, Spain’s Minister of Culture and a Sumar representative.

These reforms reflect the government’s commitment to curbing real estate speculation and prioritizing housing for Spanish residents.

Still, implementing the measures and overcoming resistance from various economic and political stakeholders will be critical to their success.