Spain slaps huge tax on foreign-bought homes, in blow to Americans
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Spanish Prime Minister Pedro Sanchez on Monday proposed a 100% tax on foreign-bought homes to help address the country's housing crisis.
Why it matters: The tax would apply to all homes that non-EU residents purchase, a figure that's grown substantially over the past few years, Sanchez said.
What they're saying: "In 2023, non-residents from outside of the European Union bought around 27,000 homes and apartments in Spain — not to live in them but mainly to speculate and make money from them," Sanchez said at a housing event this week.
- "With the housing scarcity that we have, we clearly cannot allow this."
By the numbers: Foreigners made up 15% of all real estate purchases in Spain in the third quarter of 2024, according to Spain's Association of Registrars.
- Spain's popularity as a tourist destination has made housing increasingly unaffordable.
- "There are too many Airbnbs. What's lacking is housing," Sanchez said.
Zoom in: Americans are a big part of Spain's expatriate boom.
- The number of US citizens officially residing in Spain grew by 13% from 2019 to 2021, Spain's National Statistics Agency (INE) reported in 2023 – a change from 39,812 to 41,953.
- Home sales to Americans increased 88% between the first half of 2019 and first half of 2022, according to a report by the General Council of Notaries in Spain.
- Among international groups buying Spanish property, Americans paid the second most (behind Danish residents), paying about $3,119 per square meter, due largely to their concentration in expensive urban areas like Madrid. During that same period, the home prices that grew the most were paid by Americans, the report says.
- The Spanish government announced last year that it would abolish the "golden visa" program introduced in 2013, which granted residency rights to foreigners investing at least €500,000 (about $514,991) in Spanish property.
Context: Buying property abroad became extremely popular during the pandemic, especially as multiple Southern European countries implemented golden visa programs.
- It helped tumultuous economies like Greece and Portugal's rebound.
- But the skyrocketing housing costs mean that to some countries, foreigners have outstayed their welcome.
