British expats face a 100pc tax penalty on their Spanish property if they leave it empty for three years, under new legislation.
In a proposal made on Wednesday, Spain’s socialist government promised local authorities the ability to apply a 50pc tax surcharge to penalise empty homes after two years. This surcharge will increase to 100pc after three years.
For those who own two or more properties, the maximum surcharge will rise to 150pc, official documents said.
Homeowners in Spain pay property taxes known as “IBI”, which stands for Impuesto Sobre Bienes Inmuebles, the equivalent of council tax in the UK.
The annual taxes are based on a central government valuation of the property and local municipality rates, which range from 0.4pc to 1.3pc.
The proposed law also gives town halls in areas struggling with overtourism the power to charge holiday lets more in council tax. Holiday lets will also pay a 10pc VAT charge, the official decree stated.
Alex Radford, a lawyer at My Lawyer In Spain, told The Telegraph: “The law gives town halls that have housing stock under pressure the ability to charge more local rates for properties rented out as tourist properties.”
But he said: “This is a plaster. Spain needs to build more properties and make the planning permission process more efficient and quicker.”
