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British nationals looking to buy property in Spain could soon face an unprecedented financial hurdle, as the Spanish government considers a new 100% property tax aimed squarely at non-EU residents. The proposal, part of a wider housing reform initiative by Prime Minister Pedro Sánchez’s administration, has triggered alarm among international buyers and expats alike.
What’s Being Proposed?
The draft legislation, unveiled this month, outlines plans to impose a tax equivalent to 100% of the purchase price of properties bought by non-EU citizens—effectively doubling the cost of buying a home in Spain.
If passed, the law would apply to all non-EU nationals purchasing real estate in Spain, including British citizens, who lost EU status post-Brexit. This group represented a significant 8.2% of all foreign property purchases in Spain in 2023.
“This is not a tax—it’s a blockade,” one British buyer told HomesGoFast. “It’s like putting up a ‘not welcome’ sign for international property investors.”
Why Is This Happening?
The Spanish government says the proposal is designed to tackle a deepening housing crisis. Rising demand from foreign investors—particularly in cities like Barcelona, Madrid, and holiday hotspots like the Costa del Sol—has pushed property prices out of reach for many Spanish residents.
“We are prioritising homes for people who live and work in Spain,” said Sánchez during a press briefing. “This is about accessibility, not xenophobia.”
Other measures in the package include:
- A new 21% VAT on short-term tourist rentals.
- A vacancy tax for property owners who leave homes empty.
- Expanded investment in affordable and social housing projects.
More from Reuters: Spain considers 21% VAT on short tourism rentals
Impact on British Buyers and the Property Market
Spain has long been a favourite destination for British retirees, second-home owners, and holiday let investors. According to official data, Britons purchased over 6,000 Spanish properties last year alone.
Real estate experts warn that this proposed tax could lead to a mass exodus of British interest in the Spanish market, with buyers looking instead to more investor-friendly destinations such as Portugal, Cyprus, or Greece.
“The impact could be severe. We’re already seeing a spike in inquiries for alternative locations,” said John Walters, a UK-based international property consultant.
Read more on the shifting market here: The Independent – Spain tax bombshell
Will It Actually Happen?
The proposed tax is still far from becoming law. Spain’s parliament is divided, and the Socialist-led government lacks an outright majority. Conservative regional leaders in areas such as Andalusia and the Balearic Islands have already vowed to block the measure if it reaches the regional level.
Legal experts have also raised red flags. A 100% property tax could be challenged as unconstitutional, potentially violating Spain’s principles of proportional taxation and economic fairness.
“This kind of tax could be seen as confiscatory,” said constitutional lawyer María González. “It’s highly likely to face legal challenges, both domestically and through the European Court of Human Rights.”
More from The Times: British homebuyers face 100% tax under Spanish reforms
What Should Buyers Do Now?
For British nationals and other non-EU investors considering a purchase in Spain, the situation is fluid. We recommend:
- Monitoring updates from the Spanish government and international media.
- Consulting with legal experts who specialise in Spanish real estate.
- Considering alternative markets while Spain’s legislative process plays out.
For regular updates on international property laws and tax changes, subscribe to the HomesGoFast Newsletter and follow us on Facebook.
Further Reading:
- BBC News: Spain plans 100% tax for homes bought by non-EU residents
- Telegraph: Spain’s 100% tax raid on holiday homes
- Standard: Spain’s housing crackdown could hit UK buyers hard
