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Realtors in Spain are urging foreigners to ‘buy now’ before Spain’s proposed housing measures come into force to tax, limit or even ban purchases by non-EU, non-residents.
Earlier in January, Spain’s Prime Minister Pedro Sánchez shocked many around the world when he announced that his government was preparing legislation to massively increase the tax burden on non-resident third-country nationals such as Brits and Americans who buy homes in Spain.
This came as part of a raft of measures intended to address Spain’s housing crisis, which has priced out many locals and residents from rents and buying homes. By putting a 100 percent tax on property purchases for some foreigners, the government hopes to dissuade many from doing so in order to free up housing for locals.
READ ALSO: Why does Spain now want to totally ban some foreign home buyers?
However, a week or so later Sánchez went even further and proposed an outright ban: “We are going to propose banning non-EU foreigners from buying houses in our country, in cases where neither they nor their families reside here and they are just speculating with those homes,” the Prime Minister said.
Both measures have made international headlines, with British and American media in particular paying close attention to the story. However, reports in the Spanish press now suggest that the bold policy proposals may have actually had an unintended consequence dubbed the ‘boomerang effect’.
The proposed measures have reportedly led to a surge in enquiries from overseas for Spain-based estate agents, who expect the tax and ban plans to drive up demand and sales in the coming months as a pre-emptive reaction.
This follows on from an uptick in golden visas granted after it was announced that the scheme would be scrapped, which was given as one of the reasons to cancel the golden visa in the first place.
READ ALSO: Deadline to apply for Spain’s last golden visas set for April 2025
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Paloma Pérez Bravo, CEO of Spain Sotheby’s International Realty, told Spanish daily El Mundo that the “biggest sales peaks always start in March, which is when many of these clients are able to travel and come to Spain to view properties and close transactions. This year we expect it to be a good spring and that many of these clients, once here, will decide that it is better to buy now, given what might happen. So we do expect an acceleration in spring.”
Many property experts doubt how likely either proposal is to come to fruition, mainly due to the problems the government currently has getting legislation through Congress, but nonetheless realtors and estate agents are advising clients to buy now just in case.
“At the moment, this measure is noise,” Pérez Bravo says. “We believe that the restrictions on foreign purchases are not going to go ahead and that is what we are telling foreign clients who ask us, but we are also advising them and telling them that when in doubt, buy now.”
Foreigners have traditionally been one of the main drivers of the Spanish property market. In the first half of 2024 alone, they made 69,412 transactions and have a market share of 20.4 percent, according to data from the General Council of Notaries.
However, non-resident, non-EU nationals (the group targeted by the proposals) represent barely 3 percent of the total number of property sales and purchases in Spain.
The nationalities that stand to be most affected by the changes would be UK nationals, who completed the most of the transactions (3,480) in the first half of last year. They are followed by Americans (695), Norwegians (489), Ukrainians (480), Swiss (416), Russians (414), Chinese (257) and Argentinians (166).
As The Local has reported, non-EU citizens more widely (including both resident and non-resident) only represent 14 percent of the total number of foreigners who bought property in Spain in 2023.
READ ALSO: Are non-EU property buyers really to blame for Spain’s housing crisis?
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In this sense, accusations from political opponents and some in the property sector that these policy proposals are performative noise, more political than they are economic, seem somewhat fair.
However, Spain’s housing crisis has become such a dominating topic in the last year that it is understandable the Sánchez government feels the need to be seen to be doing, or trying to do, something about it.
Whatever Spain eventually decides, or, rather, is able to do, whether it be raise taxes for non-EU, non-resident property buyers or ban them completely from buying if they have no ties to Spain, in the short-term, what seems clear is that the uncertainty had caused a surge in enquiries and estate agents are only telling their clients one thing: buy now, before it’s too late.