The Spanish Socialist Party (PSOE) has introduced a bill in Parliament that has the potential to fundamentally change the real estate market for non-EU citizens, particularly Britons. The proposal envisages an additional 100 percent tax on the purchase price of properties for individuals from outside the European Union. This would mean that a buyer from a non-EU country acquiring a property for 500,000 euros would effectively have to pay one million euros – 500,000 euros for the property and another 500,000 euros in tax.
According to the PSOE, the aim of this drastic measure is to facilitate access to housing for Spanish citizens and to counteract the nationwide housing shortage. The new regulation would be levied as an additional tax to the existing property transfer tax and would only be relevant for non-EU residents.
Experts from the Council of Economists illustrate the proposal’s sensitivity. Augustin Fernandez, president of the Spanish Register of Economists and Tax Advisors (REAF), described the plan as “madness.” He also expressed doubts about the legal viability of this tax, which would ultimately have to be decided by the courts. Fernandez also fears that such a step would “penalize” investments from non-EU foreigners.
It remains to be seen whether this proposal will actually be implemented. The PSOE’s initiative could also be a symbolic gesture, as the share of real estate purchases by non-EU citizens is only about 3%, and these buyers already pay the highest average price per square meter. Nevertheless, such a tax, should it become a reality, would undoubtedly have significant implications for the Spanish real estate market and relations with non-EU investors.
