Spain is taking bold steps to combat its ongoing housing crisis by proposing a 100% tax on homes purchased by non-EU residents. This measure, announced by Prime Minister Pedro Sánchez on January 13, 2025, is part of a broader reform package aimed at alleviating housing shortages, soaring rents, and rising property prices across the country. The government attributes much of the strain on housing to foreign buyers and the impact of mass tourism.
Housing Crisis in Spain
Addressing a forum titled “Housing, the Fifth Pillar of the Welfare State”, Sánchez called access to housing one of the most pressing challenges facing Spanish society today. He emphasized the growing divide between wealthy property owners and financially struggling tenants, which he warned could lead to economic and social instability.
“Housing prices in Europe have increased by 48% in the last decade, nearly double the rise in household income,” Sánchez said. “We are facing a serious problem with enormous social and economic implications.”
The housing shortage is particularly acute in popular tourist destinations, such as the southern coast, the Canary Islands, and urban centers like Barcelona and Alicante. In these areas, locals often compete with foreign investors and holiday rental operators for limited housing options, driving up costs and fueling public discontent.
The Role of Foreign Buyers
The proposed 100% tax on homes bought by non-EU residents is designed to discourage speculative investment in Spanish real estate. In 2023 alone, non-EU residents purchased 27,000 properties in Spain, often with the intent of profiting from speculation rather than living in the homes. Sánchez argued that this behavior exacerbates the housing crisis by reducing the availability of affordable housing for local residents.
“The progressive coalition government has always embraced foreign investment, but we want it to be productive—encouraging innovation and creating jobs, not serving speculation as if housing were just a financial asset,” Sánchez explained.
This proposal is part of a broader government effort to limit foreign ownership of Spanish properties. Last year, the administration announced plans to abolish the “Golden Visa” program, which granted residency rights to foreigners who invested at least €500,000 in real estate.
Additional Measures to Address the Crisis
The 100% tax is just one of 12 reforms unveiled by Sánchez to make housing more accessible. Other measures include:
- Tax Incentives for Affordable Rentals: Landlords offering affordable rents will receive tax breaks.
- Renovation of Empty Homes: A program will be launched to renovate vacant properties and make them available for affordable rental.
- Expansion of Public Housing: The government plans to increase the availability of social housing and ensure it remains state-owned.
- Regulation of Tourism Apartments: Apartments used for tourism will be taxed as businesses to prevent them from driving up rental prices.
These reforms aim to address both the immediate housing shortage and the long-term affordability of Spanish homes.
Public Backlash Against Over-Tourism
The housing crisis has fueled public resentment against tourism in Spain, which locals blame for rising rents and property prices. In tourist hotspots, anti-tourism protests have become increasingly common, with incidents such as tourists being doused with water pistols and signs urging visitors to “go home.”
Spain’s economy, however, heavily depends on tourism, which accounted for over 13% of GDP and around three million jobs in 2024. The country welcomed over 88.5 million international tourists in the first 11 months of 2024, a record-breaking figure. Despite its economic benefits, the sector’s impact on housing affordability remains a contentious issue.
Challenges Ahead
While the proposed tax and other reforms signal the government’s determination to address the housing crisis, questions remain about their implementation and effectiveness. The government has yet to provide details on how the tax on non-EU buyers will be enforced or when the proposals will be put to a parliamentary vote.
Spain’s housing crisis reflects broader challenges faced by many European countries as they grapple with rising property prices and housing shortages. However, with decisive actions like these, Spain hopes to strike a balance between foreign investment, tourism, and the right to affordable housing for its citizens.
↔ 
↔ 
↔ 
↔ 
↔ 
↔ 
↔ 
↔ 
↔ 
↔ 
→ 
→ 
→ 
→ 
→ 
→ 
→ 
