Big changes could be coming to Spain’s property market! Last night, Pedro Sánchez’s government proposed a 100% purchase tax for non-EU, non-resident buyers and announced increased taxes on tourist rentals. These measures aim to address housing affordability but could have significant implications for property owners, buyers, and investors.
Let’s break down what this means for you:
What Is the 100% Purchase Tax?
This proposal targets non-EU buyers purchasing holiday homes in Spain without securing residency or visas. Currently, purchase taxes in Andalucía start at 7%, but this proposal could double that to 14% or more, effectively making holiday homes much more expensive for foreign buyers.
While the government argues this will cool property prices in high-demand areas like the Costa del Sol and Barcelona, critics point out that it’s unlikely to address the real issue: a lack of housing supply.
Will This Really Happen?
The proposal is still in its early stages, and many experts believe it could face challenges, including compliance with EU regulations. Similar measures, such as limiting Golden Visas, were widely debated but watered down during implementation.
For now, the key takeaway is that no changes are immediate, so if you’re planning to buy property in Spain, 2025 may be a good time to act before further announcements.
What About Tourist Rentals?
The government has also proposed increased taxes on short-term rentals, particularly holiday lets. This includes:
- Treating holiday rentals as businesses: Landlords would need to charge 10% VAT (IVA) and potentially pay additional Social Security contributions.
- Higher costs for compliance: Property owners would need to engage third-party managers to meet these requirements, adding more operational expenses.
This move is seen as a win for the hotel industry, which has long lobbied for equal taxation, but it could significantly impact small landlords renting out properties to tourists.
Why Is Spain Taking These Steps?
The government says these measures aim to tackle housing affordability and address inequality in the rental market. However, there are broader issues at play:
- A lack of new housing: Since the 2008 financial crisis, Spain has seen little new construction, leading to a shortage of affordable homes.
- Underutilized properties: Many properties remain uninhabitable or in need of significant renovation, keeping them out of the market.
- Political motivations: Blaming foreign buyers and holiday lets for rising prices is an easy way to win support, but experts argue this doesn’t address the root causes.
What Does This Mean for Buyers and Sellers?
For non-EU buyers considering holiday homes in Andalucía, this adds uncertainty to the process. Prices in areas like the Costa Tropical remain relatively affordable, but these proposals could change the dynamics.
For sellers, it’s crucial to stay informed about market trends. While demand may remain steady for now, potential tax hikes could influence buyer interest in the future.
Final Thoughts
While these announcements may seem daunting, it’s important to remember they are proposals, not laws. Whether you’re buying, selling, or renting property in Spain, staying informed is key.
If you’re unsure how these changes might affect you, we’re here to help. Reach out to us for expert advice tailored to your needs.
