GIBRALTARIANS will likely not be exempt from proposals in Spain to double the tax paid by non-EU residents when buying property – even in the event of a deal.
This is the verdict of real estate experts on the Rock after Spanish Prime Minister Pedro Sanchez announced his 12-point housing plan, which is threatening to to raise by 100% the tax levy paid by non-EU residents who buy a second home.
It could mean an end to second – or even third – homes in Sotogrande and other nearby resorts for Gibraltar’s wealthy class, or at least make the villas harder to acquire.
Sanchez insisted the law, to begin in 2026, is necessary due to ‘an excess’ of Airbnb rentals and ‘a lack of properties’.
“Our obligation is to prioritise homes for locals over tourist use,” he stated. “We will make a change so tourist apartments are taxed as a business so they will pay the same as hotels.
“We are also going to limit the purchase of homes by non-EU non-residents who buy about 27,000 houses annually, mainly for speculation.”
To do this the government is considering plans to raise by 100% the tax levy paid by non-EU residents who buy a second home.
Mike Nicholls of Chesterton’s told the Olive Press the policy will ‘discourage or even eliminate purchasing in Spain by Gibraltar locals.’
“However, those who own property in the government housing sector in Gibraltar cannot own a second property anyway, so this new move is unlikely to materially impact the local Gibraltar market.
“Fortunately there’s hardly any parallel with Gibraltar as we have very few holiday homes and only a few empty properties so this tax hike is unlikely to be copied here.
“But agents in Sotogrande must be fuming!” he added.
Meanwhile, Charles Gomez of Charles Gomez & Co, saw the positives for the Rock and even an opportunity.
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“There will be investors who, having been shunned by Spain – or threatened with sky-high taxes – may consider Gibraltar as an option,” he wrote.
But he believes it would require a ‘redoubling of efforts’ to make Gibraltar an ‘attractive place to live in’, as well as a ‘clear message from the Government of Gibraltar that it does not consider foreign investors to be an easy target for taxation to make up deficits incurred over many years.’
“It is true that Gibraltar has an endemic housing problem, but it would be wrong to forget that the building of affordable housing over the last 30 years has, in great part, been funded by the proceeds from land sales to high-end developers and recurring income in terms of stamp duties and employment generated by luxury housing of which there is a long line of new projects currently in the pipeline.”
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Pedro’s swingeing new property tax, if enacted, will follow April’s end of the Golden Visa scheme – the residence permits for foreigners who buy houses for more than €500,000.
To fight fraud, the Spanish government is also planning to tighten the regulation of seasonal rentals.
A fund will also be created for Spain’s 17 regions to apply for money to increase inspections of tourist properties to ensure they are licensed.
“This scheme is only likely to create confusion in the market,” claimed boss of Marbella’s Panorama, Chris Clover. “And it might deter some individuals from purchasing in Spain.”
Meanwhile, Adam Neale at Terra Meridiana, in Estepona, described it as ‘moronic’ and added: “The 12-point plan should have read: ‘Build more social housing 12 times’.”
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