Spanish fury over bid to stop Brits buying holiday homes: Politicians slam 'xenophobic' 100% tax plan and say they will REFUSE to enforce it - as estate agents dismiss the idea as 'silly'
Spanish politicians have hit out at the government's 'xenophobic' plan to tax non-EU property buyers - including Brits dreaming of retiring by the sea.
Luis de la Matta, communications director for the centre-right Partido Popular, said the party was 'not going to facilitate a xenophobic measure', casting further doubt on whether the plan set out by the ruling minority coalition would pass in parliament.
'The problem is not that people want to live in Spain, the problem is that there is a lack of housing,' he said on Tuesday amid growing backlash over the 12-point proposals for reform.
Real estate agents based in the country also told the Majorca Daily Bulletin that they thought the plan was 'silly', but doubted Sanchez would be able to gather enough support for the law to pass.
Resolving a housing crisis has become one of prime minister Pedro Sanchez's most pressing challenges amid a chronic shortage of affordable homes and rising rents.
His Socialist government said on Monday it would limit the purchase of homes by non-EU residents by increasing the tax they have to pay by as much as 100% of a property's value, pointing to similar schemes in Denmark and Canada.
Spanish real estate platform Fotocasa said the measure may discourage foreign investment, but suggested its effectiveness would be questionable since only two per cent of Spanish homes are purchased by non-EU residents.
The Catalonia Tenants' Union likewise said most of the foreign buyers in the region were from the EU and described the measure as 'grandiloquent but irrelevant'.
Demonstrators march shouting slogans in downtown Barcelona, Spain, Wednesday, June 19
Tenerife locals hold placards raising concerns about the impact of mass tourism, October 2024
Pedro Sanchez (pictured January 8 in Madrid) faces mounting backlash over the proposals
The contentious tax for non-EU residents would need approval from a fractured parliament and would be applied by Spain's regional governments.
The PP governs in most of the regions popular with British and Latin American buyers of second homes such as Andalusia, Valencia, the Canary Islands and the Balearic Islands.
The tax would be applied through a so-called Property Transfer Tax (ITP) and would affect as many as 26,000 second-hand properties located in large cities and coastal areas popular with tourists, a Housing Ministry source said.
Homebuyers in Spain currently pay between 6% and 13% ITP tax, depending on the region.
Criticism continues to mount over the proposals, many slating it as an ineffective measure to solve much deeper issues with housing.
Jose M. Lopez-Avalos, a solicitor at Malaga Solicitors, told MailOnline the measures 'will not sort out the housing problems in Spain'.
'Instead of promoting new construction, reducing taxation, reducing the bureaucracy of local councils, put public plots of land in the market at a reduced price, et cetera, they insist on old practices which will only enlarge the property problem that young people have in Spain.'
'For the moment they are just announcing this and not creating confidence, and it will take months or years in order for these measures to come into force,' he added.
He assured that, for now, Brits 'should not worry'.
Malaga Solicitors has been helping expat property investors in Malaga for over 25 years.
In 2023 alone, non-residents from outside of the EU bought 27,000 houses and flats in Spain, 'not to live in them, but mainly to speculate', Pedro Sanchez said (Altea pictured)
The 100 per cent tax would put rocket boosters under Spain's famously affordable property prices, with a five-bed coastal villa in Andalucía that's currently being advertised for just under £400,000
Kate Spalton is thinking about selling her two-bedroom holiday home in Cala Blanca, Menorca but is now worried she won't be able to
Britons furious with the proposals have already shared their concerns about the viability of their overseas investments, however.
Kate Spalton, 68, told MailOnline she was thinking about selling her two-bedroom holiday home in Cala Blanca, Menorca but is now worried she won't be able to if non-EU citizens face a massive extra charge.
She told MailOnline: 'I have been holidaying here for 25 years and finally bought my own place eight years ago. As I am nearing 70 I had thought of selling in the next couple of years but with this tax nobody will want to buy.
'I'm horrified to be honest. Menorca is very much a tourist island and we seem to be getting stymied at every turn. I feel this is really victimising non-EU people when the Balearics also attract a lot of Germans and Spanish second home owners from Madrid.
'I support the economy by employing local Spaniards to paint my home and do the plumbing, I go to local supermarkets and don't take anything with me.
'All that will happen is that I will leave my home empty and eventually in disrepair. That's not in anyone's interests. This is a disaster for everyone and British tourism will fall away completely.'
Sean Wooley, a British expat who lives in Marbella and runs Cloud Nine Spain, which sells 'prestige' properties to wealthy buyers, told MailOnline: 'Spain needs to be careful what it wishes for, bearing in mind that tourism is it´s number one export, and the country has attracted a huge amount of tax revenue from people who have relocated to Spain for a better quality life.
'For sure, they need to take care of their own, but they need to be careful that they don´t alienate those foreigners that have helped to create wealth for those everyday Spaniards who are now demanding change.'
Demonstrators carry a sign reading 'Alicante is not for sale' in a protest against overtourism
An England supporter stands among a crowd protesting outside the Alicante tourism office
Pedro Sanchez assured that the new tariff would help 'prioritise the availability of housing for residents'.
He noted that in 2023 alone, non-residents from outside of the EU bought 27,000 houses and flats in Spain, 'not to live in them, but mainly to speculate'.
He said this was 'something that, in the context of the shortages we are experiencing, we cannot afford'.
Sánchez didn't provide a timeline or details on how he plans to implement the tax.
CaixaBank, Spain's third-largest lender by market value, revealed in fresh analysis this month that foreign demand for housing in Spain has continued to grow since the end of the pandemic.
Foreigners were driving nearly 20 per cent of all transactions, a 30.7 per cent increase from 2019 levels.
While Sanchez will be in part trying to respond to demand for affordable housing options for residents, non-resident foreigners, including Brits, more often buy more expensive properties, with an average price of €2,895 per square metre in H1 2024, compared to €1,734 for resident foreigners and €1,659 for Spaniards, Caixa reports.
Spain is also planning to bring an end to its 'golden visa' programme by April, which has allowed non-EU citizens to obtain residency by investing in lucrative property worth more than €500,000.
Still, analysts at Caixa expect the end of this programme will have little impact on the wider market. Just over 15,000 such visas were granted between 2013 and October 2024, many to Brits.
