The measure announced by Pedro Sánchez, destined among others to fight the real estate crisis and which has yet to be adopted by Parliament, echoes the already announced abandonment of “golden visas” granted to foreign citizens who make an investment of at least €500,000 in real estate or a business.
How many houses are affected?
According to the socialist prime minister, “in 2023, non-residents outside the European Union purchased around 27,000 houses and apartments in Spain.” That year, 638,552 real estate transactions were registered, of which 123,159 were carried out by foreigners, whether residents or not, from the EU or not, equal to 19.3% of the total, according to data from the Ministry of Housing.
“It is making it more difficult for non-Europeans to buy houses, but this does not mean that houses automatically become cheaper, because the percentage of purchases coming from this public is not very high”, underlines Joan Carles Amaro, professor specializing in properties at the Esade business school, based in Barcelona.
In some regions, however, and more particularly in the coastal areas or archipelagos of the country, the percentage of housing purchased by foreigners (without distinction) is significantly higher than at a national level: in 2023 it reached 31.5% in the Islands Balearics, 29.2% in the Valencia region or 28.6% in the Canary Islands. On the other hand, this rate stands at 6.3% in the community of Madrid, where the real estate crisis is also very serious.
Who are the foreign buyers?
According to data from the property register, the British, non-EU citizens after Brexit, were in the lead among foreign buyers of property in 2023, with 9.5% of total transactions carried out by foreigners.
Behind them, the Germans (7.2%) and the French (6.7%), effectively excluded from the measures envisaged by the government due to their countries’ membership of the EU, then the Moroccans (5.4%) and the other Europeans (Belgians, Italians, Romanians, Dutch).
Is there a similar system in other countries?
Today in Spain, in addition to notary and legal fees, you have to pay a transfer tax of 6% to 11% of the purchase price for the purchase of an old house or a 10% VAT for a new property, without distinction depending on the origin of the buyer. Presenting his measure, Pedro Sánchez explained that he wanted to draw inspiration from similar systems existing in Denmark and Canada.
The Canadian government prohibits the purchase of housing by non-resident aliens in order to “use all possible means to make housing more affordable,” according to the Ministry of Finance. The measure, implemented at the beginning of 2023, was extended at the beginning of the year until 1 January 2027.
In Denmark, purchasing a property for a non-resident foreigner is almost impossible: access to the property is reserved for people who have resided in the country for at least five years and who have obtained specific authorization from the chancellery – however the conditions are reduced for EU countries . citizens.
How is the measure implemented?
In one of the areas where the share of foreign buyers is highest, in Mallorca, in the Balearic Islands, Bernd Kunze, partner of a real estate agency, is sceptical: “This law would not help Spanish citizens because they need cheap spaces to rent ”, and not the luxury properties in which his agency specializes, he summarizes. “On the part of the owner or the entrepreneur who sells these houses to these buyers, I don’t think they will say to themselves: well, since I won’t be able to sell it to a non-European, we won’t put it up for affordable rent,” agrees economist Joan Carles Amaro.
In the United Kingdom, where around 100,000 pensioners live in Spain, according to data provided by Richard Donnell, director of the British property classifieds site Zoopla, Pedro Sánchez’s announcement did not go unnoticed. “Hundreds of thousands of Britons, retired or still working, are leaving the UK for the warmer climes of Europe,” recalls Stephen Abletshauser, a lawyer at Spencer West.