100% Tax on Spanish Property Purchases

Announcing the idea, Prime Minister Pedro Sánchez said the "unprecedented" measure was necessary to meet the country's housing emergency.

"The West faces a decisive challenge: To not become a society divided into two classes, the rich landlords and poor tenants," he said.

Non-EU residents bought 27,000 properties in Spain in 2023, he told an economic forum in Madrid, "not to live in" but "to make money from them".

However this is no more than an idea on how to tackle the problem.

Spanish Prime Minister Pedro Sánchez said the measure aims to prioritize housing availability for local residents.

He did not disclose specifics about how the proposed tax would function or when it might be brought before parliament, where he has often faced difficulties securing enough support to pass new laws.

According to his office, the proposal seeks to curb home purchases by "non-resident non-EU foreigners." In Spain, individuals are considered non-residents if they spend fewer than 183 days in the country annually.

The government stated that these buyers could face an increased tax burden of up to 100% Tax on Spanish Property Purchases, similar to policies already in place in countries like Denmark and Canada.

Officials said the proposal would be finalized following a thorough review.

Foreign buyers, including those from within the EU, accounted for roughly 15% of Spain’s housing market in 2023, with 87,000 of 583,000 total property sales, according to the Spanish property registry.

"Naturally who wants to pay 100% purchase tax for buying a property here,". "The Brits have always been big buyers here in Spain, but obviously it is going to increase the buying power of EU citizens like the German, French and Belgians, so it doesn't appear to be very fair just to isolate non-EU buyers." He added: "Something needs to happen to increase the amount of houses coming onto the market, but this is an extreme proposal." Antonio de la Fuente, managing director at Colliers International Spain, did not think 100% tax would solve the housing problem. "We all agree we are in a problem of not enough supply and we need to produce new supply to give people migrating from other parts of Spain to big cities like Madrid, Valencia, and Malaga a new home. "But this will be a drop in the ocean in my opinion and there will be other alternatives that will have a higher impact on the housing market."

🏘️ Spain’s 100% Property Tax Proposal: A Bold Move or a Policy Misfire?

In early 2025, Spanish Prime Minister Pedro Sánchez ignited a national and international debate by announcing a proposed 100% property purchase tax on non-EU, non-resident buyers. Framed as a tool to combat housing scarcity and prioritise access for Spanish residents, the proposal has been met with both praise and fierce criticism across the political, social, and real estate spectrums.

At its heart, the proposal aims to curb what the government calls “speculative foreign investment,” particularly in coastal and high-demand areas such as Costa Blanca, Balearic Islands, and Catalonia, where locals often struggle to find affordable homes.

🧾 What Is the 100% Tax Proposal?

The measure would impose an additional tax equivalent to 100% of the property’s value on purchases made by non-resident, non-EU buyers—essentially doubling the cost of acquisition. This would apply only to foreign individuals who do not reside in Spain for at least 183 days per year.

While details are still under study, the policy could mimic restrictions in countries like:

• Canada, which has banned most foreign purchases for two years in major cities

• Denmark, where non-residents must meet strict requirements to buy second homes

🎯 Government’s Justification

Prime Minister Sánchez argues the goal is simple: put residents first. The government claims that in saturated markets like Alicante and Malaga, foreign demand is driving up prices, leaving younger Spaniards unable to buy.

Key points from the PM’s office:

• Housing is a right, not a speculative asset

• The tax would only affect non-resident, non-EU investors

• Final implementation will follow legal review and international agreements

📉 Potential Impacts on the Market

1. Sharp Decline in Foreign Sales

Foreign buyers made up ~15% of all Spanish home purchases in 2023—87,000 out of 583,000. Non-EU citizens (e.g., British, Americans, Russians) account for a large portion. The new tax could drastically cut this demand.

2. Impact on Costa Blanca

Regions like Costa Blanca South (including Torrevieja, Orihuela, Benidorm) rely heavily on British, Dutch, Belgian, and American buyers. The 100% tax could decimate interest in new builds and resale properties, impacting developers and local economies.

3. Ripple Effect on Developers

Many housing projects are financed or greenlit based on off-plan sales to international buyers. A sudden drop could lead to construction slowdowns, job losses, and abandoned developments.

📣 Industry and Public Response

Real Estate Professionals:

• Call it “extreme” and “ineffective” for solving housing shortages

• Argue that new supply, not demand suppression, is the key

Economists:

• Warn of decreased foreign direct investment

• Fear a “cooling” effect that could stall Spain’s post-pandemic property recovery

Local Governments:

• Some support measures to regain control of urban centres

• Others, especially in tourist regions, are worried about lost tax revenue and seasonal income

🌍 Affected Populations

The following nationalities would be most impacted:

• UK nationals (post-Brexit non-EU status)

• Americans, who are increasingly drawn to Spain for retirement or remote work

• Russians and Chinese, who often invest in high-end coastal properties

• Non-resident investors from outside the EU generally

Meanwhile, EU buyers (German, French, Belgian, Dutch, Irish) would not face the tax—potentially giving them an unfair market advantage.

🛠️ Are There Better Alternatives?

Experts and stakeholders offer more targeted solutions:

• Build more affordable homes on public land

• Regulate short-term rentals (e.g., Airbnb) that crowd out long-term housing

• Offer incentives for property owners to rent to locals

• Focus on vacant home taxes rather than nationality-based penalties

🤝 How Spanish Prime Property Helps Navigate the Uncertainty

For potential buyers and investors, this moment may feel unstable. Spanish Prime Property offers expert guidance to help navigate:

• Legal advice and residency options (e.g., the Digital Nomad Visa)

• Tailored property searches in non-restricted areas

• International mortgage support

• Currency exchange and secure cross-border transactions

• Relocation services and removals

By staying informed and flexible, buyers can still find opportunities—especially in regions or circumstances not affected by the tax (such as long-term residency plans or EU passport holders).

🧭 Conclusion: Caution Ahead

Spain’s 100% tax proposal is one of the boldest housing reforms seen in Europe this decade. While its intent to prioritize local residents is noble, the measure risks doing more harm than good—particularly to Spain’s tourism-dependent regions and foreign investment reputation.

As discussions continue and the policy goes through legal review, the real estate sector will be watching closely. The stakes are high—not just for foreign buyers, but for Spain’s housing future as a whole.