Sánchez housing plan sparks British debate on foreign homeownership in Spain

Foreign property limits capture UK headlines

by Lorraine Williamson
Trump US-Spain

British media outlets, including The Guardian, Financial Times, and The Telegraph, have closely followed Spanish Prime Minister Pedro Sánchez’s proposal to restrict foreign ownership of property in Spain. This plan, which includes increasing taxes for non-resident foreign buyers to 100% of the property’s value, has dominated discussions in the UK.

According to data from Spain’s Colegio de Registradores, foreigners purchased 24,700 homes in Spain during the third quarter of 2024, representing 15% of all property transactions. British buyers accounted for 8.5% of these, leading foreign transactions, ahead of Germans, Moroccans, Poles, and Italians.

Tax increases and fraud crackdowns

UK outlets have highlighted Sánchez’s plan to align Spain’s tax policies with countries like Denmark and Canada. These measures include stricter regulations to combat fraud in short-term rental markets.

The Financial Times noted Spain’s long-standing appeal as a destination for holiday-home buyers, a trend linked to rising property prices. The paper also pointed out mounting public frustration over Spain’s housing crisis, marked by soaring prices and insufficient new developments to meet demand.

Challenges for residents in Spain

For many residents in Spain, particularly young professionals and families, the housing crisis has made homeownership and long-term renting increasingly unattainable. Rising property prices and a lack of affordable rental options have pushed many into precarious living situations. The shortfall in new housing construction has further exacerbated the issue, with local residents often competing with wealthier foreign buyers for limited housing stock.

Unclear timeline and policy details

The Guardian reported that Sánchez has yet to clarify the specifics of his proposal, including when it will reach Parliament. Meanwhile, The Telegraph reminded readers of Spain’s recent termination of “golden visas,” which allowed foreigners to gain residency by investing at least €500,000 in property.

Scepticism over impact

Antonio de la Fuente, managing director of Colliers, cast doubt on the plan’s effectiveness in addressing Spain’s housing challenges. Speaking to the Financial Times, he called the annual 27,000 property purchases by non-EU residents a “drop in the ocean” compared to Spain’s 26 million homes.

De la Fuente questioned whether the proposal would ever become law. However, he noted that the uncertainty created by the announcement could deter both individual and institutional investors, prompting them to consider alternatives outside Spain.

A growing debate

As the details of Sánchez’s housing reforms remain unclear, the debate continues. The proposal reflects broader tensions between addressing housing affordability and maintaining Spain’s appeal to foreign buyers, particularly those from the UK.

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