Although I personally think that this will not solve the problem they are trying to fix, the Spanish government has proposed a set of measures aimed at addressing the country’s housing crisis, which include significant tax implications for foreign non-resident buyers from outside the European Union. One of the key proposals is to impose a tax of up to 100% on the purchase of properties by these individuals, but the other is to absolutely ban the purchase. These measures are intended to prioritize housing availability for residents and curb speculative investments, which are believed to contribute to rising property prices. Spain is not the first country to apply such a measure: Canada and Denmark have already applied it.
In Catalonia, the regular Property Transfer Tax and Stamp Duty (ITPAJD) rates at this very moment from 10% (purchase up to €600,000) to the 13% above €1,500,000.
In the investing market, a specific rate of 20% has been established for purchases of residential properties by large holders (nationals or not) and for acquisitions of entire buildings. This measure aimed to discourage real estate speculation and promote housing affordability. The definition of a large holder has been updated to include individuals or entities with five or more residential properties in designated high-demand areas, ten or more residential properties in general, or residential properties exceeding 1,500 m² in total area. These high-demand areas were identified based on the specific criteria set by the regional government. Furthermore, large holders are required to register with the newly established Register of Large Housing Holders. A failure to comply with this registration requirement may result in financial penalties. These changes reflect Catalonia’s efforts to regulate the housing market, ensure access to affordable housing, and avoid thinking about housing as an investment.
In addition to this, the government plans to reform the taxation of short-term rental properties, such as those listed on platforms like Airbnb. The aim is to ensure these rentals are taxed appropriately as business activities, aligning their tax treatment with that of regular hotels. Other initiatives include offering tax incentives to property owners who rent out their properties at or below the government’s reference price index, transferring public land and existing housing to a newly established public housing company to increase the supply of affordable rental units.
As of now, the proposed increase in the Impuesto sobre Transmisiones Patrimoniales y Actos Jurídicos Documentados (ITPAJD) for non-EU foreign buyers has not been implemented. However, this proposal remains under consideration but has not yet been enacted into law. Therefore, the current ITPAJD rates remain unchanged.
I personally hope these measures will never come true. Foreigners looking for a place in the sun are looking for private housing in second homes, normally in coastal areas. The types of properties they look for do not compete with the regular or normal housing markets. The biggest housing issue in Spain is in big cities where nationals and immigrants fight to find a place to live, but never in the luxury market, including in this concept the kind of properties including pool, BBQ, eventhough the house itself could not be considered a luxury one. Therefore this will not solve the existing problem.
