Property Taxes in Spain for Non-EU Purchasers
Last week, we were asked by The Telegraph newspaper in the UK to comment on recent pronouncements by Pedro Sánchez, the Prime Minister of Spain. Since these pronouncements were made, around property taxes in Spain, we have been asked by many other people for our opinion and below I have copied my thoughts,
“The pronouncement by Pedro Sánchez on Monday was a proposal and is very far from becoming any kind of law. I equate it to Haute Couture on the catwalk: these are concept designs and no-one in their right mind would buy some of them! However, the concept gets filtered down and turned into something affordable, practicable and appealing to the mass market.
I've spoken to our Spanish lawyers and accountants and they have a typical Spanish take on this - ie, it is a proposal at the moment and not a law. Spanish property taxes are set and managed at regional level and not every region is governed by PSOE, Pedro Sánchez's party. The feeling is that this proposal would struggle to be passed through government.
I can understand why measures have been announced. Last year, Spain had a record number of visitors: 88.5 million. The population of the country only stands at 48.3 million. Steps have been taken to cap the issue of tourism licenses in the popular coastal resorts, and central government has, for some time, been trying to attract higher-spending visitors to embrace inland Spain and take the strain off the coastal areas. I think what the government is trying to avoid is the mass investment that has been seen in London, where Russian and Chinese (and others) investors buy up great chunks of new-build property in areas like Vauxhall or Docklands, and then just rent them out for exhorbitant sums. As you know, the Airbnb culture in cities like Barcelona, Valencia and Málaga does have an impact on local rental values, forcing the local population to move out to find more affordable accommodation; this is not sustainable.
The other problem that Sanchez faces is the shortage of affordable and social housing. He needs to raise money to pay for an increase in provision of this type of housing.
In terms of the Spanish Dream...as long as non-EU, non-Resident buyers understand all aspects of buying a property in Spain, then the dream can continue. I was shocked by the number of British people who sat on their laurels post-Brexit referendum and before the Withdrawal Agreement deadline who did nothing to secure their residency here, despite repeated warnings from the British Embassy in Madrid over a 2 year period. Take advice from a Spanish lawyer or a legal firm based in Spain with taxation and immigration experience, and find out what options exist. Spain is the most amazing country in which to live and it has presented my husband Andrew and I with opportunities we would never have had in the UK. Spain needs British visitors and investors, but mass speculation and investment on an industrial scale needs to be controlled. Sánchez himself referred to the taxation laws in Canada and Denmark that were implemented to control foreign property investment, so Spain's proposal is nothing new.
To conclude, the UK is no longer a member of the EU and the previous freedom of movement that allowed British citizens to move to other EU countries with ease doesn't exist. In time, this may change; we live in hope. However, never give up on the dream - it is still there but be prepared to do some groundwork in order to fulfill that dream.”
Subsequently, I provided further feedback to another journalist:
“The most recent comments made by Pedro Sánchez have to be taken in context. The pronouncements were made during PSOE (Socialist Party) rallies in Castilla-La Mancha, Extremadura and Asturias. Sánchez is the socialist leader of a minority coalition government banging a very socialist drum on the eve of Trump’s inauguration, and in the face of opposition Sánchez has been struggling recently to get laws passed.
This opinion comes at a time when it was announced that Santiago Abascal, the leader of far-right party Vox, was invited to Trump’s inauguration but Pedro Sánchez was not present - La Vanguardia 14th January 2025”. Even within the past 24 hours, it has been reported that Elon Musk made an appearance at a far-right rally in Germany.
