Spain is revealing a series of measures to address its escalating housing crisis, including imposing up to a 100% tax on properties purchased by individuals who are neither citizens nor residents of the European Union.
Spanish Prime Minister Pedro Sánchez introduced the plan this week, emphasizing the need to tackle housing affordability and high rents across the nation. He stated that the initiative’s primary aim is to provide “more housing, better regulation and greater aid.”
“The West faces a decisive challenge: To not become a society divided into two classes, the rich landlords and the poor tenants,” Sánchez declared while announcing the proposal.
However, whether Sánchez’s minority coalition can push the plan through parliament remains uncertain. Here’s a closer look at the situation:
Spain’s Housing Affordability Crisis
Spain, like many affluent nations, is grappling with a worsening housing affordability issue. Skyrocketing rents are particularly pronounced in cities such as Barcelona and Madrid, where wages have failed to keep pace, especially for young people. Property prices have also steadily increased, especially in urban and coastal regions.
Tourism, one of Spain’s key economic drivers, has contributed to soaring rental prices. With over 88.5 million visitors in 2024, Spain is among the world’s most popular tourist destinations. Short-term rental contracts targeting tourists, often through platforms like Airbnb, have exacerbated the issue.
Mass tourism has also sparked tension between visitors and residents, particularly over rising costs and strained resources like water supplies in areas such as the Canary and Balearic Islands.
Protests erupted across the country last year as citizens expressed frustrations about high rents and the impact of tourism. Barcelona’s town hall has pledged to eliminate all short-term rentals for tourists in the coming years.
“What citizens expect from us here is action,” Spanish housing minister Isabel Rodríguez said on Tuesday in support of the plan.
Restricting Foreign Purchases of Spanish Homes
As part of its strategy, Spain aims to curb property purchases by foreign nationals by introducing a tax of up to 100% on homes bought by non-EU citizens who are not residents of EU countries. These buyers are often investors or individuals seeking vacation properties.
Housing in Spain (Photo: Getty Images)
Sánchez did not provide a timeline or specific details about implementing the tax.
“This would be massive,” said Sarah Conroy, an English real estate agent with over three decades of experience in Marbella’s luxury market. While she did not share exact figures, she noted that her non-EU clients include post-Brexit British buyers as well as individuals from Saudi Arabia and Dubai.
“They need to do something because the people living here can’t really rent anything because it is so expensive,” Conroy said. “Personally speaking, around 80% of the people I sell to are buying second homes.”
In 2024, Spain ended its “golden visa” program, which allowed wealthy non-EU nationals to obtain residency permits by investing over half a million euros (approximately $515,000) in real estate.
Economic Concerns and Criticism
Joan Carlos Amaro, a real estate analyst and professor of economics at Esade Business School in Barcelona, expressed skepticism about the proposed tax. While acknowledging Spain’s housing crisis, he doubted the tax would ensure that high-end properties end up benefiting middle-class Spaniards.
“Anything that puts up barriers and stops the market from functioning ends up hurting everyone,” Amaro said. “These foreigners that come, they spend money, the houses they live in have to be built and that creates jobs.”
Amaro characterized the proposal as more of a political statement than a policy grounded in economic logic.
Additional Measures
Beyond taxing foreign buyers, Spain plans to expand public housing. Around 2 million square meters (21.5 million square feet) of residential land will be allocated to a new public housing agency.
Other proposed initiatives include increasing taxes on holiday rentals, offering tax breaks and protections for landlords who provide affordable housing, and amending laws to accelerate construction processes and expand the availability of land for private housing projects.
Political Stakes
Rising living costs have fueled voter discontent in many wealthy nations, and Spain is no exception. For Sánchez, resolving the housing crisis is essential to maintaining support for his left-wing minority coalition, which secured another four-year term in 2023.
Housing is not just a political priority but also a constitutional mandate. According to the Spanish Constitution, all citizens have the right to a “decent and adequate” home. In principle, the government is obligated to ensure that right is upheld.
