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In a significant policy shift, Spanish Prime Minister Pedro Sánchez announced on January 13, 2025, a series of measures aimed at addressing the nation’s housing crisis. Among these, a notable initiative is the imposition of substantial fiscal burdens on non-resident foreigners from non-EU countries, including the United Kingdom and the United States, who wish to purchase property in Spain. This move is designed to curb speculative investments and make housing more accessible to Spanish citizens.
During the “Housing: Fifth Pillar of the Welfare State” forum, Sánchez highlighted that in 2023 alone, non-EU non-residents acquired approximately 27,000 houses and apartments in Spain. He asserted that these purchases were primarily for speculative purposes rather than for personal residence, contributing to housing shortages and escalating prices. To deter such investments, the government plans to increase the tax burden on these transactions, potentially up to 100% of the property’s value.
This policy draws inspiration from measures implemented in countries like Denmark and Canada, which have imposed restrictions on property purchases by non-resident foreigners to protect their housing markets. Sánchez emphasized the necessity of this approach in Spain’s current housing emergency, aiming to prioritize the needs of residents over foreign investors.
Más viviendas, mejor regulación y mayores ayudas para el acceso a la vivienda.
— Pedro Sánchez (@sanchezcastejon) January 13, 2025
Esa es la política del Gobierno de coalición progresista. Con las medidas ya aprobadas y con las 12 medidas nuevas que aplicaremos ahora.
Nos vamos a dejar la piel en la causa de la vivienda.
Por… pic.twitter.com/frt87gAdL4
The announcement has elicited varied reactions. Proponents argue that it will alleviate housing shortages and make homes more affordable for Spanish citizens. Critics, however, express concerns about potential negative impacts on the real estate market and the broader economy, particularly in regions that have traditionally attracted foreign buyers.
In addition to the tax measures, the government unveiled a comprehensive package of 12 initiatives to tackle the housing crisis. These include the creation of a Public Housing Company to manage over 30,000 properties, prioritizing the acquisition of existing homes and land for development. The plan also introduces public guarantee systems to protect both landlords and tenants, promotes the rehabilitation of vacant properties for affordable rentals, and offers tax exemptions in the personal income tax (IRPF) for landlords who set rents according to a reference price index.
Furthermore, the government intends to regulate tourist accommodations more stringently, treating them as economic activities subject to value-added tax (VAT). This measure aims to address the proliferation of short-term rentals, which has been linked to increased housing scarcity and rising rents in urban centers and popular tourist destinations.
The proposed reforms also include a new Strategic Project for Economic Recovery and Transformation (PERTE) focused on innovation in modular construction, aiming to modernize building practices and increase the supply of affordable housing. Additionally, a reform of the Land Law is planned to facilitate the availability of land for residential development.
These measures represent a significant shift in Spain’s housing policy, reflecting the government’s commitment to addressing the challenges of housing affordability and availability. The emphasis on limiting foreign speculation, increasing public housing stock, and regulating the rental market underscores a multifaceted approach to a complex issue affecting many Spaniards.
As the government moves forward with these initiatives, it will be essential to monitor their implementation and impact on both the housing market and the broader economy. The balance between deterring speculative investments and maintaining a healthy real estate sector will be crucial in ensuring that the measures achieve their intended goals without unintended adverse consequences.
In conclusion, Prime Minister Sánchez’s announcement marks a proactive effort to tackle Spain’s housing crisis through a combination of fiscal policies, regulatory reforms, and investment in public housing. By targeting speculative property purchases by non-resident foreigners and implementing a broad range of supportive measures, the government aims to create a more equitable and accessible housing market for its citizens.
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