The Spanish government is still extremely concerned about the high numbers of residential properties that are purchased by foreign nationals, often to be let out as holiday rentals. The Prime Minister, Pedro Sanchez, spoke at the forum "Housing, the Fifth Pillar of the Welfare State" in Madrid, to outline new steps his Government will take to off-set Spain's housing crisis and improve access to housing for the Spanish people. The escalation under the Golden Visa Programme has now become a worry. (non-EU and non resident. The potential tax would not affect those who have a legal permit in Spain).
Mr. Sanchez expressed concerns about society becoming divided to become two classes – rich landlords and poor tenants - the 12 measures he outlined are all aimed at providing homes at affordable purchase prices and rentable social housing, with incentives for property owners that rent out empty properties.
Andreu Marin, an associate in the Barcelona office, commented "the Prime Minister's far reaching proposals aim to reform the housing market and provide affordable homes and prevent foreign nationals purchasing properties for investment in short term lets and the consequential rise in property prices." Andreu further commented that "the Spanish Government has made more than one attempt to pass legislation that limits the acceleration of house prices due to foreign national's speculative investments. However, the hospitality and tourist industries fear that such measures would considerably reduce the revenue arising from these economically important sectors, therefore is it possible that some aspects contained in the proposals may be modified. Furthermore, as the current Primer Minister lost the last elections in 2023 and the majority in Congress, he also faces major defeats in Congress and the situation is still uncertain, so the Spanish people could be called to early elections before the end of this year."
The aspects of the new measures outlined by Pedro Sanchez that will affect foreign nationals buying property in Spain the most are:
New Rate of Purchase Tax for non-EU citizens
The key proposal that will have the most impact on British citizens hoping to buy a residential property (only applicable for non-residents) in Spain is the proposed increase in tax to up to 100% of the property's value. This unprecedented measure is intended to deter foreign purchasers from making speculative purchases with a view generating an income through holiday lets, which practice it is suggested has escalated property prices preventing many Spanish nationals from being able to afford rent or buy a property.
Increase in Purchase Tax for Short Term Rentals
In addition to the increased tax proposed to be applied to property purchase, there is also the intention to increase taxes related to short term rentals let out as Airbnbs to the level of that paid by the hotel industry. Both measures, if implemented, could curtail the tourist activity in Spain. However, Giambrone & Partners real estate lawyers point out that in 2024 the number of tourists who visited Spain rose 13% in the first six months of the year and the revenue foreign tourists generated and was more than 180 billion euros, representing approximately 14% of the national GDP. If the measures are implemented by the Spanish Government, it is hard to see how that level of income could be replaced.
Abolition of the Golden Visa Programme
The Spanish Government had previously announced the intention to renounce the Golden Visa programme that was introduced in 2013 to encourage inward investment and principally aimed at retirees and those investors considering investing in Government projects or business start-up, The commercial investment aspect of the Golden Visa will still stand. The proposal to remove the residential real estate aspect was put before the Spanish Congress and has now been enacted in law in a close run vote of 177 votes in favour to 170 against and will come into force in 3 April 2025.
Foreign nationals that already hold a Golden Visa need not be concerned as the original terms will be upheld and the Golden Visa can be renewed under the original provisions. Individuals who have already submitted an application will also be permitted to continue with their application under the regulations in existence at the time of the submission.
The last day to make an application for a Golden Visa is 2 April 2025, which means that submission under the Golden Visa Programme on the basis of residential purchase of a property over €500,000 is still possible, provided the application is very swift.
Giambrone and Partners real estate lawyers in our Spanish offices can act are extremely efficient and can act on a submission very quickly. Do not hesitate to take the last opportunity to relocate to Spain under a Golden Visa.
In conclusion, non-EU citizens may have to reconsider relocating to Spain in light of the higher costs if the Government decides to implement the new proposals outlined by Pedro Sanchez.
In conclusion, non-EU citizens may have to reconsider relocating to Spain in light of the higher costs if the Government decides to implement the new proposals outlined by Pedro Sanchez.
Andreu Marin has extensive experience in immigration matters, from obtaining visas (non-lucrative, Golden Visa, student or Schengen visas) to applications for EU family members, deportations and Spanish citizenship.
He has also successfully acted in a wide range of criminal proceedings, assisting foreign nationals with extraditions, EAW (European arrest warrant) and at hearings with defendants, amongst other matters.
Andreu is well-regarded by his clients for his comprehensive understanding of their needs and objectives which enables him to advise them and provide the best legal solution to their problems. He is able to create a strategy for his clients to achieve their objectives that can be adapted when necessary to meet other issues that may arise.
Andreu has successfully obtained non-lucrative visas for all the British clients he has assisted through the consulates in London, Manchester and Edinburgh since joining the firm in October 2022.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
