Spain plans 100% tax on non-EU home buyers after ending golden visas

Planning to buy a property in Spain? Think again! The country is preparing a series of measures to address its housing crisis, including a proposed tax of up to 100% on properties purchased by non-EU citizens or residents, including Indians. The move comes amid growing opposition to foreign buyers in tourist hotspots and high-demand city centres.

 

According to news agency Bloomberg, Spanish Prime Minister Pedro Sánchez this week outlined the government’s strategy to tackle housing affordability challenges in Southern Europe. Speaking about the plan, Sánchez said, “The West faces a decisive challenge: to avoid becoming a society divided into two classes, the rich landlords and the poor tenants.”  

 

According to the Spanish PM, non-EU residents bought a total of 27,000 properties in Spain in 2023, not to live in it but to make money from it.

 

Housing minister Isabel Rodríguez added, “What citizens expect from us here is action,” while addressing reporters on Tuesday.  

 

The proposed tax would target non-resident buyers from outside the EU, who often invest in holiday or rental properties. Parliament must approve the measure before it can be enacted.  

 

In 2023, sales to foreign buyers accounted for 15% of the housing market, with 87,000 transactions out of a total of 583,000 involving overseas purchasers, according to Spanish property registration data.  

 

Political and economic backdrop  

  Housing costs have become a contentious issue in Spain, due to rising living expenses in many developed nations. For Pedro Sánchez, resolving this crisis is critical as he leads a left-wing minority coalition. His government secured another term in 2023, but addressing housing shortages remains essential for political stability.  

 

Spain’s housing market experienced a boom-and-bust cycle during the global financial crisis. Between 1995 and 2008, property prices and construction surged, tripling in value. However, prices collapsed by a third between 2008 and 2015, with developers slowing construction in the aftermath.  

 

British buyers, once dominant in Spain's housing market, have seen their share decline sharply since Brexit. In 2015, they accounted for over 20% of foreign purchases, but by late 2024, their share had dropped to 8.5%, according to Estadistica Registral Inmobiliaria.  

 

Spain has also ended its "golden visa" programme, which offered residency to non-EU nationals who invested more than €500,000 in property.  

 

What this means for Indian residents

 

While Indians in Spain will be affected by these decisions, they represent a small proportion compared to larger immigrant groups, such as Moroccans and Romanians, each numbering over half a million. As of January 2024, around 60,679 Indians live in Spain and they are mostly based in cities like Madrid and Barcelona or in regions like Ceuta, Melilla, and the Canary Islands.  

 

Language barriers and limited historical ties between India and Spain may contribute to relatively low migration figures. Spain’s economic conditions and immigration policies could also influence its appeal.  

 

Indian students in Spain make up a minor segment of the population. Of the 101,871 foreign students enrolled, only 1,087 are from India.  

 

Living costs in Spain for Indians  

Data from University Living, a housing marketplace, shows that average monthly expenses for Indians in Barcelona are €1,165. Accommodation typically costs €450, while utilities amount to €565. Other costs include transport (€75) and miscellaneous expenses (€75).  

 

For other Spanish cities, monthly expenses average €875, with accommodation costing €300, utilities €440, transport €60, and other costs €75. Spending habits significantly affect the total.