Spain Introduces 100% Tax on Foreign Home Buyers to Combat Housing Crisis

Spain’s Socialist Prime Minister Pedro Sanchez has announced a controversial 100% tax on homes purchased by non-EU foreigners as part of a 12-step plan to address the country’s escalating housing crisis, Al Jazeera reported. This measure aims to deter foreign investment in residential properties, which Sanchez argues exacerbates housing shortages and rising prices.

In 2023, foreign buyers acquired 27,000 apartments, making up 15% of real estate purchases. Sanchez emphasized that housing should primarily benefit Spanish residents and working migrants, not speculators. Additional proposals include higher taxes on holiday rentals, tax incentives for affordable housing, and expedited construction laws.

With an estimated need for 600,000 new homes by the end of 2025, the government plans to transfer land for social housing development. Despite facing challenges in parliament, Sanchez stressed that addressing the housing crisis is a top priority, as rents have surged by 11% in 2024, particularly in urban centers and tourist hotspots.