Eamon Shahir and Michael Morris are both expats in Spain who think the proposed tax has several flaws
“I believe it is a positive move in theory – in reality it won’t make much of a difference,” says British expat Eamon Shahir on plans in Spain to impose a 100 per cent tax on properties bought by non-EU residents.
Spain’s prime minister, Pedro Sanchez, announced plans for the punitive property tax this week in response to soaring rents in the country’s major cities, which have been partly blamed on foreigners and tourists driving up local house prices.
There has been a mixed response with some supporting the idea whilst others have said the proposed measure will not solve the housing crisis.
Mr Shahir, who is 28 and moved to Spain from London last year, said: “If you are not planning on moving and living in Spain, then you should definitely pay extra for any property you buy.”
But he says the government needs to be careful not to deter people away from the country.
“They heavily rely on tourist income so have to get a fine balance between not losing holidaymakers and keeping their locals happy.
“After being on the ground here for almost a year now, you can see the struggles of local people. They have a weak job market and the rising prices are starting to get to them.”
Those outside the European Union (EU) who do not currently live in Spain will now face a new levy on property purchased, which may be as high as 100 per cent of the value of a home, according to the Spanish government’s proposals.
Real estate in Spain is currently taxed at 10 per cent for new-build homes and 6 per cent for existing properties.
Sanchez said the “unprecedented” measure was necessary to meet the country’s housing emergency, claiming non-EU residents bought 27,000 properties in Spain in 2023, “not to live in, but to make money from”.
Mr Shahir, who is the founder of international tax returns company Taxd, says that for those moving to Spain, the rule change would make “no difference.”
But he says it is those who want to buy holiday homes that will be the hardest hit.
“For UK residents that are looking to acquire a holiday home in Spain where maybe they use it a few weeks a year and rent it for the remaining period, this now wouldn’t make sense if a 100 per cent tax is imposed,” he adds.
Other Brits living in Spain have also said they agree there is a problem with housing costs in the European country, but that the 100 per cent tax is not the solution.
Michael Morris, a 78-year-old Brit who moved to Spain nearly nine years ago and lives near Alicante, says there is a “desperate shortage” of homes across the country.
“The property developers tend to concentrate on ‘lock up and leave’ standard two-bed holiday homes. Whereas there is a growing demand for family homes for the increasing general population,” he says.
He says the situation is “highly divisive” and that anyone non-EU “tends to be blamed” for the high prices.
But he doesn’t believe that a 100 per cent tax is the antidote.
He says: “It just wouldn’t be an answer to the problems. The government needs to incentivise more builders to build better homes. At the moment builders will go for the cheaper option.
“They’re not being given the incentive to build the homes that are needed. They could allocate land to developers which can only be used for residents and at affordable prices.”
He says the 100 per cent tax would not affect Brits who want to come and live out in Spain, like him and his wife, but that the holiday home market “would be hit.”
Mr Morris, who lives in Spain on the UK state pension, believes overall the idea of a 100 per cent tax is a “soundbite” from the prime minister.
“He [Sanchez] is running out of ideas a bit. It deflects from the main emergency in Spain which is that here isn’t enough homes being built for Spaniards,” he says.
