Houses along a hillside outside Marbella on the sunny coast, Costa del Sol, in Spain.
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Spain is planning to impose a tax of 100% on homes bought by non-EU residents as it looks to tackle an entrenched housing crisis in the country.
Spanish Prime Minister Pedro Sanchez on Monday proposed a package of measures aimed at alleviating a shortage of homes, high rents and rising house prices across the country, with foreign home buyers and mass tourism seen as contributing to housing pressures.
Speaking at a forum on the matter, socialist leader Sanchez said access to housing was one of the main challenges facing Spanish society and that there was a risk of division among communities.
“The West faces a decisive challenge: not to become a society divided into two classes, that of rich owners and poor tenants,” he said, noting that housing prices in Europe had increased by 48% in the last decade, almost twice as much as household income.
“We are facing a serious problem, with enormous social and economic implications, which requires a decisive response from society as a whole, with public institutions at the forefront,” he said, according to comments published by the government.
The President of the Government, Pedro Sanchez, speaks during the forum ‘Housing, fifth pillar of the Welfare State’, organized by the Ministry of Housing and Urban Agenda, at the Railway Museum, on 13 January, 2025 in Madrid, Spain. During the event, the President of the Government made a new announcement on housing, and highlighted access to housing as a key issue within the legislature, in the midst of escalating property prices, especially in large cities.
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Announcing 12 reforms designed to address the crisis, Sanchez said the government’s proposals include a plan to make sure tourism apartments were taxed “like a business” and a proposal to levy a 100% tax on the value of homes bought by non-EU residents.
Such changes, he said, would help to make housing more accessible and affordable across Spain.
“Non-residents of the European Union bought 27,000 apartments in Spain [in 2023]. They did so not to live, but to speculate, to make money with them, something that in the context of scarcity we cannot afford,” Sanchez told the forum “Housing, the fifth pillar of the welfare state” in Madrid Monday evening, in comments reported by El Periodico and translated by Google.
“The progressive coalition government has always embraced foreign investment, but we want it to be productive, encourage innovation and create new jobs, not serve for speculation, as if it were a financial asset or bank deposit,” he added.
Spain, holiday homes, tax
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Other measures introduced by Sanchez, who heads the leftwing Spanish Socialist Workers’ Party and a coalition government that includes the far-left Sumar party, included plans to provide tax relief to landlords offering affordable rents and more protection for existing tenants.
He announced plans to build more public housing and to ensure existing social housing remains the property of the state. A program would also be launched to renovate empty homes to rent them out at affordable prices, he said.
The prime minister did not provide any further details on how the tax on non-EU home buyers would work or give any indication of when such proposals could be submitted to parliament for approval.
Housing shortages, rising prices — and a strong perception that holiday home owners and holiday rentals are exacerbating the problem — has provoked a strong public reaction in Spain, as well as unrest in tourist hotspots along the south coast, Canary Islands, and in cities including Barcelona and Alicante.
Reports of tourists being told to “go home” and incidents of foreign visitors being squirted with water pistols have emerged with locals urging the authorities to tackle “over-tourism.”
A tourist takes a picture of a message at Park Guell. Anti-tourism organizers have called for a 50% reduction in daily ticket sales to the site, one of Barcelona’s top tourist draws.
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Spain’s economy relies on tourism to boost growth and jobs, however, with the sector accounting for over 13% of GDP and around three million jobs. In the first 11 months of 2024, the number of international tourists arriving in Spain reached its highest figure ever, exceeding 88.5 million, according to data from the country’s statistics agency, INE.
“Tourism is not only driving consumption expenditure, but high accommodation occupation rates are also driving record investments in hotels,” Maartje Wijffelaars, senior euro zone economist at Rabobank said in analysis last September.
“We project GDP growth in Spain to soften somewhat going forward, as growth in the tourism sector is projected to lose some steam. But growth is expected to remain strong and higher than in the eurozone in the coming quarters and years, coming in at 2.7% [in 2024], 1.9% in 2025, and 1.5% in 2026,” she said.