Spain’s Prime Minister has doubled down on his plan to stop Brits from buying property in the country, this time proposing an all-out ban.
Pedro Sanchez said he would propose to ban purchasers from outside the European Union from buying properties.
It comes as the government seeks to curb rising housing prices, which have become an increasing source of friction.
In the last year, Spain has seen a wave of demonstrations against overtourism and holiday rental properties as a result of the mounting housing crisis for residents struggling to find available homes.
“We will propose to ban these non-EU foreigners who are not residents, and their relatives, from buying houses in our country since they only do so to speculate,” Sanchez said at a political rally in Plasencia, in western Spain, on Sunday.
Non-EU residents represent about 23,000 of the almost 700,000 homes bought and sold every year in the country, Sanchez said during the rally.
Soaring rents in popular cities, including Madrid, have caused locals to feel they are being priced out of the Spanish market.
One in five homes sold in Spain are bought by foreigners, with many of them non-residents.
Sanchez on January 13 unveiled a proposal to tax by up to 100% the acquisitions of property by non-EU citizens not living in Spain as part of a series of measures seeking to boost supply and reduce demand for housing in the country.
A source close to Sanchez played down the suggestion of a ban, saying the plan remained to discourage these acquisitions through increased tax rates.
Either potential change would need to pass the lower house where Sanchez’s minority government faces a constant struggle to pass any bill.
Either way, there will be damage to Spain’s reputation, said real estate company CBRE. “All factors related to regulatory and juridical changes are discouraging investors,” said Paloma Relinque, CBRE’s executive corporate director for Spain.
Housing has become a major issue in Spain as it struggles to balance promoting tourism, a key driver of its economy, with concerns over high rents due to gentrification and landlords shifting to more lucrative, short-term tourist rentals, especially in urban and coastal areas.
The country’s Central Bank recently estimated there could be a deficit of half a million houses in Spain by the end of this year.
Targeting non-resident foreigner buyers, who tend to buy second homes particularly in beach resorts, would have a limited effect on the housing market as a whole, a spokesperson for real estate developer Gilmar said.
Official figures show that the number of Brits registered as living in Spain increased from 276,089 in 2017 to 284,037 in 2023, with 12,470 Spanish property sales involving a British buyer the same year.
