Spain’s Prime Minister, Pedro Sanchez, made a shock announcement on Monday (January 13), saying his country will begin heavily taxing foreign buyers looking to purchase homes abroad as part of the plan to tackle its housing affordability crisis and high rents.
The country’s package of 12 proposals are aimed at providing “more housing, better regulation and greater aid,” Sanchez said.
Spain is one of several countries facing skyrocketing rents in its major cities, including Madrid, Barcelona and Malaga. In these cities, foreign buyers – including Brits – snap up relatively expensive properties to let them out as short-term holiday homes, a behaviour many believe contributes to push-up prices and make homes unaffordable for locals.
At the same time, incomes are failing to keep up with rents, an issue that is especially damaging for young people.
Other European countries like Greece, France and Portugal are also suffering from similar housing problems and may soon resort to implementing similar taxes in an attempt to get a grip on the crisis.
2024 was the year of overtourism protests in Spain, as locals took to the streets to demand action over their growing frustration of being unable to afford to live in their own cities. Last year alone, Spain welcomed over 88.5 million visitors.
Sanchez’s announcement has set the bar for an ambitious list of policies that aim to ensure affordable rents and offer incentives to those who follow renting guidelines.
This includes an up to 100% tax on properties bought by non-EU residents – including Brits.
Sanchez claimed that in 2023, non-residents from outside of the EU bought 27,000 houses and flats in Spain, “not to live in them, but mainly to speculate”.
This was “something that, in the context of the shortages we are experiencing, we cannot afford,” Sanchez said.
Sanchez’s response is part of a wider trend of European leaders to respond to growing anger with current tourism models and a lack of housing. Its neighbour, Portugal, is also engaged in a battle for affordable housing and sustainable tourism practices.
Similar problems with short-term holiday rentals and a shortage of affordable housing have seen residents mobilise in cities across the country, holding banners reading: “I have to choose between paying for a house or eating”.
The Greek government was also pressed to act last year as Brits dreaming of retiring by the sea headed eastward in search of summer homes or medium-term investments. Messages appeared on walls in the capital, reading “Tourists Go Home! Greek State Kills” and “Tourists Enjoy Your Stay In The Cemetery of Europe”.
As a result, it announced a sweeping ban on short-term rental licences in three of Athens’ central districts due to “a lot of pressure on society”. Between April and October of this year, the daily tax on short-term rentals will also rise to eight euros (£6.75) – up from 1.50 euros (£1.26) in previous years.
Across the Channel in France, it too took steps late last year to temper growing frustrations over the availability of housing, passing a long-awaited bill to tighten regulations on the short-term rental market.
Between 2016 and 2024, the number of these tourist rentals grew from 300,000 to 1.2 million.
Brits hoping to move abroad to Europe will need to keep a close eye on European governments as they are forced to respond to the threat of overtourism and unaffodable housing for locals.
