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Spain Plans 100% Tax on Property Purchases by Non-EU Buyers (Who Account for Fewer Than 5% of Sales) · IMI Podcasts

• 0:00
  SPEAKER_00: Spanish Prime Minister Pedro Sanchez has announced plans to impose a one hundred percent tax on real estate purchases by non European Union residents, targeting a segment that comprises a fringe minority of the Spanish housing market.
• 0:18
  SPEAKER_00: The Spanish government aims to limit purchases by non resident non European foreigners, individuals living in Spain for fewer than 183 days annually.
• 0:31
  SPEAKER_00: According to the Spanish property registry, foreign buyers, including EU residents, accounted for 87,000 of Spain's 587,000 property sales in 2023, approximately 14% of the market.
• 0:48
  SPEAKER_00: Of these, only 27,000 properties, representing fewer than 5% of total sales, went to non-European residents.
• 0:58
  SPEAKER_00: Yet the Spanish government views this segment as a direct threat to local housing.
• 1:04
  SPEAKER_00: According to Sanchez, investors bought these 27,000 properties not to live in, but to make money from them, a practice that the government cannot allow to continue given the current housing shortage.
• 1:20
  SPEAKER_00: The tax proposal forms part of Spain's broader political strategy to combat housing costs by limiting wealthy foreign investors.
• 1:29
  SPEAKER_00: Spain will close its investor visa program on April 3, 2025, which Fragomen Director Isabel Nielsen sees as a huge blow for interested investors.
• 1:42
  SPEAKER_00: The closure creates a complex situation for potential residents.
• 1:46
  SPEAKER_00: Non-European investors must now pursue, quote, other passive routes to obtain residency, such as the non-lucrative visa, end quote, Nielsen explains.
• 1:58
  SPEAKER_00: However, this visa requires full-time residency, six months a year, to maintain the status, and applicants must prove accommodation in Spain, either through property ownership or lease.
• 2:12
  SPEAKER_00: Because of the proposed 100% tax on non-European property purchases, obtaining that required accommodation may become considerably more expensive for these visa applicants and may lead them to rent instead.
• 2:27
  SPEAKER_00: Sanchez sought to contextualize the measures by pointing to housing prices that, quote, had swelled 48% in the past decade across Europe, far outpacing household incomes.
• 2:42
  SPEAKER_00: He said the West faces a quote, decisive challenge to not become a society divided into two classes, the rich landlords and poor tenants.
• 2:54
  SPEAKER_00: He claimed the mismatch between housing prices and household incomes remains unbearable, requiring a decisive response from society as a whole.
• 3:06
  SPEAKER_00: The Spanish government plans to align the tax burden with similar measures in Denmark and Canada, potentially charging up to 100% of the property's value.
• 3:17
  SPEAKER_00: Sanchez, however, did not provide details on the tax's implementation nor a timeline for parliamentary approval.
• 3:26
  SPEAKER_00: The Spanish tax proposal emerges amid a broader European trend of governments turning to property and wealth taxes to balance budgets.
• 3:37
  SPEAKER_00: Taxes are being added at every level, property taxes, wealth taxes, and exit taxes, warns Savory and Partners CEO Jeremy Savory.
• 3:48
  SPEAKER_00: He explains that in Spain alone, investors face notary fees of 6-7% and broker fees of 6% plus VAT, creating multiple layers of taxation before any investment returns.
• 4:04
  SPEAKER_00: This tax environment, according to Savory, is pushing investors toward emerging markets, where higher yields and currency advantages create more attractive returns.
• 4:15
  SPEAKER_00: He points to a key benefit in other markets.
• 4:18
  SPEAKER_00: Landlords can charge rents in dollars while paying expenses in weaker local currencies, amplifying returns as the dollar strengthens.
• 4:28
  SPEAKER_00: Having invested in over 30 properties across 11 countries since 2002, Savory has recently sold all his European holdings in Portugal, Poland, and Greece.
• 4:40
  SPEAKER_00: His experience leads him to conclude that, quote, fiscal regimes across Europe are tightening, real estate regulations are becoming stricter, taxes are increasing, and immigration programs for high net worth individuals are being scaled back.
• 4:59
  SPEAKER_00: Savory's market analysis extends beyond Spain.
• 5:03
  SPEAKER_00: Quote, many people are selling in France because of impending changes to buy-to-let laws, end quote, he notes.
• 5:11
  SPEAKER_00: While Germany is experiencing a massive economic correction, he points to Portugal's cancellation of the Golden Visa for real estate investments and the NHR program as further evidence of tightening regulations.
• 5:26
  SPEAKER_00: For affected investors, especially those who miss out on the Golden Visa, Nielsen suggests exploring other more favorable European Union jurisdictions offering similar statuses.
• 5:40
  SPEAKER_00: This episode first appeared as an article by Ahmad Abbas on imidaily.com.
• 5:47
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• 5:54
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