Dylan Wagemans
THE Spanish Socialist Party PSOE has proposed a new bill in parliament that all people from outside the EU need to pay a 100% tax if they buy a property.
In other words, Brits who buy a home in Spain, will have to pay the same amount in taxes as the house has cost them.
Spanish socialists made this proposal to facilitate access to rental homes for Spaniards, among the nationwide housing shortage.
The new regulation aims to create a new complementary tax to the Property Transfer Tax so that it only affects citizens residing outside the EU.
Some experts of the Council of Economists gave an example that shows the magnitude of the proposal.
If a Brit wants to buy a house valued at €500,000, it would mean that they have to pay €1,000,000, including the tax.
The president of the Spanish Registry of Economists and Tax Advisors (REAF) Augustin Fernandez, has called this proposal ‘madness’.
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“The consideration of whether or not this tax is legal will end up being resolved by the courts,” Fernandez said.
He has also said that this proposal will ‘penalise’ investment by non-EU foreigners.
The initiative by the PSOE may be more symbolic, since the share of non-EU property buyers is only about 3%, and the average price they pay is already the highest per square metre.
Hi Dylan, do you know if people who already own property will be grandfathered in. IE, only new purchases after the date this tax comes into effect?
Hi Melanie. It seems that the proposal only allows for taxes on new purchases. That’s of course IF the bill would ever make it through parliament, which seems unlikely at this moment
What a ridiculous proposal. If anything it could exacerbate the rental crisis as non EU citizens would potentially apply for visas and then seek to rent a property as the tax prevents them from affording a purchase
Exactly this ^^^^^
This article is not correct and is very dangerous.
The proposal is NOT for it to be calculated at 100% of the property value, as you have incorrectly suggested. So a house being purchased for €200,000 WILL NOT incur taxes of another €200,000 under this proposed law.
What is actually proposed is that there is an increase of 100% of the existing tax rate for non-EU buyers. So, if the property tax rate is currently 7% of the property value (as it is in Costa del Sol and Costa Brava), this proposed increase would increase the rate to 14% of the property value if the buyer is a non-EU resident.
Secondly this may not even happen! The Spanish Government may well be challenged by the EU who could rule that it is discriminatory. Spain previously implemented a similar discriminatory inheritance tax. This law was challenged in the European courts and was ruled out.
Even if the law is passed, it is likely to take up to a year or longer to come into effect.
CONCLUSION: You will now and for at least another year not pay 100% more of the property price, only the usual 7%…
Thank you for clarification of what POSSIBLY/may not come into force. Bravo!!
With the non stop negative spin on anti tourism protests, the possibility/or not of taxation etc.
Press spin. It’s all doom and gloom.
I, as a new purchaser, only recently completed my sale and to be honest have Questioned on many occasions “what am I doing”?
Wonder though; how many of the actual throng of protesters are genuinely affected. Or, is there an element as with a lot of demonstrations of thuggery?
It doesn’t take long for published hate to spread Insidiously.
You are correct in your feedback of Spaniards. Who increasingly exploit their own. The same purchasers will have gained from tourism profiteering. This facet is never reported…. its tourists this. Tourist that.
0ld saying springs to mind “never bite the hand that feeds”
Like many, I have purchased in a town with a diminishing population. So actually helping to save a town. Plus affording me to live my dream of over 30 years.
The hot tourist spots are now out reach for the majority. That is the greed and the core of the whole issue.
At last the first time I’ve seen a definition on what the proposed 100 % is to be taxed. Pretty steep if it really is on the whole amount.
However it won’t have any significant impact on the creation of affordable homes.
What percent within that quoted figure of the 3 % ( non EU property ownership) is accounted to British? 3′ % seems to he very low.
Hi Mark, I would give you an https link to the full article but I do not know if this permitted here? However I am sure it is not a problem to tell you it is at CENSORED.
Sorry
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