All posts tagged Spanish Property Tax
In January of this year, the Spanish president announced his plans to implement a 100% property tax on property purchases for “foreign non residents” who live outside of the EU. At the time, we took a closer look at the proposal in our blog post, here.
Fast forward to today, and as more data has recently been released, we’re revisiting the proposed plan. The more data that is revealed, the more it becomes clear why this plan has not been put into action.
As ever, our most reliable source for all things related to this topic is Spanish Property Insight, who have gathered the most recent data, which has helped us to look into this situation more clearly. So, lets look into things a little deeper…
The most recent Spanish notary figures reveal that the market share of non EU, foreign non residents has slipped, once again, from 2.9% to 2.7%. Meaning there is a very big discrepancy between what is being said by the Spanish president, and what the notary figures actually reveal.
The graph above, by Spanish Property Insight breaks down foreign demand each year over the last six years into non-resident buyers from outside of the EU and all other foreign buyers.
“In this period, Non-EU Foreign Non Resident’s accounted for 13.5% of the foreign market, compared to 86.5% for other foreign buyers who would not be affected by the proposed tax.”
This 13.5% market share is not an amount that is driving the housing crisis in Spain.
As with the figures from 2023, the data from 2024 reveals much of the same information. The largest groups of foreign non resident buyers, which are the British, American, Swiss and Norwegian, are not competing with Spanish locals for homes within the city.
According to Spanish Property Insight the above figure “breaks down total demand into local buyers, Non-EU Foreign Non Residents, and all other foreign buyers, illustrating how small a share of the market Non-EU Foreign Non Residents represent, with a market share of just 2.7% in the latest period.”
In the words of Mark Stucklin of Spanish Property Insight…
“…even if implemented, the (100% tax) policy would do nothing to make housing more affordable. Instead, it would damage local economies in regions like the Costa del Sol, Costa Blanca and Murcia, where foreign holiday-home buyers are vital.”
The data speaks for itself.
We endeavour to keep on top of the information as it comes in, and update and inform our customers as soon as we can, with accurate and reliable information. Stay posted for further updates as they come in regarding this proposed tax increase.
In the meantime if you have any questions or queries, please don’t hesitate to get in touch here, or call us on 0161 870 2276
*All images, and data in this article have been sourced from Spanish Property Insight.*
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The “Spanish dream” of owning a property in Spain hit the headlines recently, after a proposed property tax was presented by the Spanish Prime Minister. An increased tax on property purchases for non residents who live outside of the EU.
This news caused concern amongst those of us from outside of the EU who are looking to purchase property in Spain. However, it isn’t always easy to find reliable and trustworthy information regarding such topics as this. So we headed straight for the ever reliable Spanish Property Insight, for their help and guidance with this topic. They have gathered data and information which helped us to look into this proposal a little closer.
The Proposal:
At the start of the year the Spanish Government stated that they plan to impose a higher tax of up to 100% on property purchases by non-resident buyers from outside of the European Union. The Spanish Government called these buyers “speculators” who they claim are exacerbating the housing crisis by driving up the property prices for local residents.
The Data:
According to the government 27,000 homes were purchased by non-resident buyers from outside of the EU in 2023. However, Spanish notary figures show that 18,648 homes were purchased by this group. That is actually a 7% year on year decline.
Furthermore, the figures also show that over the past decade this segments (non residents from outside of the EU) level of investment has been slowly shrinking, with 2023 figures being the lowest outside of the pandemic years of 2020 and 2021.
A declining growth pattern is in direct opposition with the Spanish Governments claims that this segment is the driving force behind the housing crisis:
Image by Spanish Property Insight
In 2023 non residents from outside of the European Union represented 14% of the total foreign buyer market. This is a decline from the high of 25% in 2014 and 2015.
The total foreign market, which is dominated by EU expats from countries such as France and Germany, has grown much faster.
In 2023, there were 623,000 home sales in Spain. The non residents from outside of the EU segment had a share of just 2.99% which is the smallest share, with 79% being local buyers, and 18% being foreign buyers:
Image by Spanish Property Insight
According to regional data, British buyers concentrate in coastal regions such as the Costa del Sol, Costa Blanca and Murcia, in urbanisations that cater to the international buyer. All of which are locations that do not typically overlap with the regions experiencing house shortages.
In fact, in the specific locations that are suffering the most, the number of non-residents from outside of the EU is too small to create an impact. Furthermore, the property purchases appear to be larger villas and second homes close to the coast, not the affordable housing stock within the cities.
What Does It Mean?
In conclusion, the data shows that non-resident buyers from outside of the European Union play a minor role in the Spanish housing market. The market share for this segment is not only small, but is actually declining. The data also shows that the property being purchased by this segment focuses on the Costas, well away from the areas experiencing the housing crisis.
Ultimately, the Spanish Governments portrayal of this segment as “spectators” that are driving up the housing costs for locals is not supported by the evidence. Therefore a high taxation or total ban for this segment seems both disproportionate and misaligned from the realities of the Spanish property market.
In our opinion, it could be said that the above data speaks for itself. In addition to this, the many processes that would have to be navigated in order to bring this proposal, or any proposal like this, into place could be lengthy.
We endeavour to keep on top of the information as it comes in, and update and inform our customers as soon as we can, with accurate and reliable information. Stay posted for further updates as they come in regarding this proposed tax increase.
In the meantime if you have any questions or queries, please don’t hesitate to get in touch here, e-mail us at info@yourplaceinspain.com, or call us on 0161 870 2276.
*All images, and data in this article have been sourced from Spanish Property Insight, with permission.*
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