Spain’s Prime Minister, Pedro Sánchez, has intensified his stance against foreign investors in the Spanish housing market, proposing a complete ban on non-resident property buyers from outside the European Union. This includes holiday-home buyers from countries such as the UK and the US.
At a Socialist Party rally in Extremadura on Sunday, January 19th, Sánchez outlined his government’s plan to address what he called speculation in the housing market by non-resident, non-EU buyers. He stated:
“In 2023 alone—based on the latest data—23,000 houses and apartments were sold to non-resident, non-EU foreigners. These are not people from the European Union, but from outside. We will propose banning these non-resident, non-EU foreigners, who neither live here nor have families here, from purchasing properties in Spain, as they are purely speculating with these homes.”
This proposal marks a significant escalation from Sánchez’s earlier policy suggestion, made on January 13th, to impose a tax of up to 100% on residential property purchases by non-resident, non-EU buyers.
Discrepancies in Data and Claims
Sánchez’s figures regarding the number of homes purchased by this group have fluctuated. He initially stated that 27,000 homes were sold to non-resident, non-EU buyers in 2023 but later revised the figure down to 23,000. However, data from Spain’s notaries association contradicts these numbers, reporting just 18,648 sales.
The Prime Minister has accused non-resident buyers from outside the EU of driving up property prices and making housing less affordable for Spanish citizens. He argues that either heavy taxation or an outright ban would curb speculation and help alleviate the housing crisis.
Implications for Foreign Buyers and Local Housing Markets
If enacted, the proposed ban would have a major impact on British and American buyers, who make up a large portion of Spain’s foreign property market. Many of these buyers purchase holiday homes in coastal areas like the Costa del Sol, Costa Blanca, and Murcia, often with plans for eventual retirement.
Critics, however, warn that such measures could harm local economies that depend on foreign investment in property. The removal of non-EU buyers from the market could significantly reduce demand in these regions, potentially destabilizing their real estate markets.
Moreover, detractors argue that the ban would do little to address housing affordability in urban centers such as Madrid and Barcelona, where local demand, limited supply, and other economic factors are the primary drivers of high prices. They contend that the measure targets the wrong segment of the market and fails to address the core issues affecting housing accessibility for Spanish residents.
As Sánchez’s proposal unfolds, it remains to be seen whether these measures will achieve their intended goals or inadvertently create new challenges for Spain’s housing market and economy.
