Spanish PM proposes 100 per cent tax on property purchases by non-EU residents

Madrid, Jan 14 Spanish Prime Minister Pedro Sanchez has veiled plans to impose a tax rate of up to 100 per cent on properties purchased by individuals who are neither European Union citizens nor residents of Spain, EL Pais reported Tuesday.

Speaking at the 'Housing - Fifth Pillar of the Welfare State' forum, Sanchez said the "unprecedented" measure aims to address Spain's housing shortage. The tax could affect buyers from countries such as the United Kingdom, China, Latin America, the Middle East, and the United States, provided they do not hold Spanish residency.

One of the major goals, he explained, is to deter foreign citizens from purchasing properties solely to rent them as short-term holiday accommodations.

The plan is to ensure that Spain's "available homes are for residents," Sanchez said, highlighting the issue that 27,000 properties in Spain were bought by non-EU residents in 2023 "not to live in ... but to make money from them."

The Prime Minister did not provide a timeline for implementing the tax or 11 other house-related policies announced at the forum, noting that they are under "careful study."

Other proposed initiatives include tax incentives for low-rent housing and increased taxes and stricter regulations on tourist flats, Xinhua news agency reported.

"It isn't fair that those who have three, four, or five apartments as short-term rentals pay less tax than hotels," Sanchez added.