Spain to Limit Property Purchases by Non-Resident Foreigners by Imposing Huge Tax
Updated: Jan 16
Spain is set to implement significant changes regarding property purchases by non-resident foreigners, particularly targeting those from outside the European Union. This move comes as part of the government's efforts to address the ongoing housing crisis in the country.
Spain to Limit Property Purchases by Non-Resident Foreigners
Key Details of the Proposed Measures
Tax Burden on Non-EU Buyers
The Spanish government plans to impose a tax burden of up to 100% of the property's value on non-resident citizens from non-EU countries who wish to purchase property in Spain. This measure is designed to deter speculative buying and prioritize housing availability for Spanish citizens.
Among the measures announced, Sánchez (Spanish President) highlighted a 100% exemption from personal income tax (IRPF) for homeowners who rent out their homes according to the reference index. Reference: https://theobjective.com/economia/2025-01-13/gobierno-compra-vivienda-extranjeros-extracomunitarios/
Impact on Foreign Investment
In 2023, non-residents from outside the EU purchased approximately 27,000 properties in Spain, primarily for investment purposes. The proposed tax could significantly reduce the number of foreign buyers, particularly from the UK and the US, who are interested in acquiring holiday homes.
Elimination of the Golden Visa Program
Alongside the new tax measures, the Spanish government is considering the elimination of the "Golden Visa" program. This program currently allows foreigners to obtain residency in Spain by investing over €500,000 in real estate. The removal of this program is part of the government's strategy to curb speculation and ensure that housing remains accessible to residents.
Legislative Framework
The proposed measures will require legislative action to be enacted. The government aims to provide a clear legal framework that supports these changes, ensuring they are effectively implemented and enforced.
Rationale for the Measures
The Spanish government is responding to a significant housing crisis characterized by rising property prices and a shortage of available homes. By limiting foreign investment, the government seeks to make housing more affordable for local residents and address concerns about the impact of speculative purchases on the real estate market.
These measures reflect Spain's commitment to prioritizing the needs of its citizens in the face of growing foreign investment in the property market.
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Rationale Behind the Changes
The Spanish government is responding to a pressing housing crisis characterized by rising property prices and a shortage of available homes. By limiting foreign investment, the government aims to ensure that housing remains within reach for its citizens, addressing concerns about speculation and affordability in the real estate market.
As Spain moves forward with these proposed measures, the landscape for foreign property buyers is set to change dramatically. Those interested in purchasing property in Spain should stay informed about these developments, as they could have significant implications for investment opportunities in the country.
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