Spain's Prime Minister Pedro Sanchez has announced a new package of 12 measures in a bid to improve access to housing and reverse soaring property prices.
The plan announced on Monday (Tuesday AEDT) will see a 100% tax imposed on real estate purchases for non-European Union (EU) countries in a bid to improve local housing affordability.
Foreign home buyers are a significant part of the Spanish real estate market.
In the second quarter of 2024, they accounted for 14.84% of purchase transactions, 0.63% more than in the previous quarter.
This comes as Spain’s popular Golden Visa programme, which was introduced in 2013 to grant residency to non-EU citizens by investing in real estate worth more than €500,000, will end in April 2025.
The programme has driven significant foreign investment in the country but has also been criticised for spurring property price hikes and speculation in the housing sector.
In 2023 alone, non-residents from outside of the EU bought 27,000 houses and apartments in Spain, "not to live in them, but mainly to speculate and make money, said Sanchez.
The country’s Spanish Socialist Workers' Party (Spanish: Partido Socialista Obrero Español) also plans to reform the construction industry by creating more social housing, ensuring affordable rentals and offering tax incentives to those who follow renting guidelines.
The new measures also include a commitment to move thousands of houses into a newly created housing agency, as well as a plan to offer state-backed financial guarantees to young renters.
However, Sanchez’s minority government will face challenges passing any bill having drawn criticism from both the right - which labels them as too interventionist - and hard-left allies, who accuse the centrist Socialists of being too tame with abusive landlords.
“The government’s duty is to prioritise residential use of housing and prevent speculative and touristic uses from expanding in a totally uncontrolled manner at the cost of residents,” Sanchez said.
“It isn’t fair that those who have three, four or five apartments as short-term rentals pay less tax than hotels or workers,” said Sanchez.
The measure would be based on a new European Union directive on value-added tax for digital platforms, he said. Spanish hotels now pay a reduced 10% VAT rate, which is included in the bill.
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