Spain is planning a series of measures to tackle its looming housing crisis, including a tax of up to 100 percent on properties bought by non-EU residents.
Spanish Prime Minister Pedro Sánchez this week announced a plan to tackle housing affordability and high rents in the southern European country. He said the overall goal was to provide “more housing, better regulation and more aid.”
However, it remains to be determined whether the project presented by Sánchez’s minority coalition will be adopted in Parliament.
Here’s a look at what’s happening:
The housing affordability crisis in Spain
Like most rich countries, Spain is grappling with a growing housing affordability problem. Soaring rents are particularly bad in cities like Barcelona and Madrid, where incomes have failed to keep up, particularly for young people. Housing prices are also rising steadily, especially in cities and coastal areas.
Rental prices have also been pushed up by short-term contracts mainly offered to tourists. Spain welcomes more tourists than almost any country in the world, having welcomed more than 88.5 million visitors in 2024. Tourism is one of the country’s main economic drivers.
The negative aspects of mass tourism have sometimes caused tensions between visitors and residents concerned about rising costs, the proliferation of short-term rentals on platforms like Airbnb, and water supplies that may be limited in some areas. of the country, particularly in the Canaries and Balearic Islands.
Last year, protesters took to the streets multiple times across the country to express their frustration over growing tourism and high rents. Barcelona City Hall has pledged to completely eliminate all short-term rentals to tourists in the coming years.
“What citizens expect from us is action,” Spanish Housing Minister Isabel Rodríguez told reporters on Tuesday about the project.
Peter Waldkirch, director of Abundant Housing Vancouver, explains to BC Today guest host Dan Burritt how the home resale tax is linked to the province’s affordability crisis, while chief economist of the BC Real Estate Association, Brendon Ogmundson, details the unintended consequences of implementing the tax.
Stop foreigners from buying houses in Spain
Spain plans to limit the number of homes bought by foreigners by increasing taxes on properties bought by non-EU residents by up to 100 percent.
Non-EU residents bought 27,000 properties in Spain in 2023, Sánchez said in announcing the project, “not to live there” but “to make money”.
Sánchez did not provide a timeline or details on how he plans to implement the tax.
Some of the other proposed measures
Spain plans to build more social housing and allocate around two million square meters of residential land to a new public housing agency.
Other proposed measures include higher taxes on vacation rentals, tax breaks and protections for landlords who provide affordable housing, and changes to laws to speed up construction processes and increase the availability of land for private construction.
Why is housing politically important in Spain?
The rising cost of living has sparked voter discontent in many wealthy countries in recent years, including the United States.
But as one of Europe’s leading socialist politicians, the housing crisis is a crucial issue Sánchez must address as he tries to keep his left-wing minority coalition afloat after winning another four-term term. years in 2023.
Furthermore, according to the Spanish Constitution, all Spaniards have the right to enjoy “decent and adequate” housing. In theory at least, the government has a duty to enable citizens to exercise this right.
