Britons are expected to invest in Cyprus and Greece instead of Spain, experts say, as Spain plans a 100% property tax for non-EU buyers.
Spain is proposing new measures to tackle its housing crisis, including a sharp increase in property taxes for non-EU citizens. This could double the tax on properties bought by people from outside the EU.
Toby Leek, president of NAEA Propertymark, said the news will disappoint many Britons who have dreamed of moving to Spain for its convenience and better weather. While he acknowledged Spain’s need to address its housing issues, he called the proposed tax “extreme.”
Mr. Leek believes this tax will discourage many Britons, who may instead consider moving to countries like Cyprus and Greece, where property taxes are lower.
Spain’s Prime Minister Pedro Sanchez said the aim of the proposal is to create more housing, improve regulations, and offer better support. He noted that in 2023, non-EU buyers purchased 27,000 properties in Spain, often to earn money rather than to live there.
Spain, like the UK, is facing rising housing costs. High rents in cities like Barcelona and Madrid, along with the impact of tourism and short-term rentals, have worsened the problem.
Seila Sanches Lucas, a lawyer at Broadfield, said the proposal might worry people who have retired or plan to retire in Spain. However, she pointed out that the law is still just a proposal and might take a long time to pass, if it does at all.
She added that other countries, such as Dubai, are becoming attractive alternatives for retirees and investors.
Isobel Neilson of Fragomen said if the tax is introduced, many clients would choose to rent in Spain or look at other EU countries like Portugal or Italy.
Stephen Abletshauser of Spencer West LLP called the plan a “populist move” that could backfire. He said countries like Turkey, Italy, Malta, Cyprus, and even France might benefit as they compete to attract wealthy retirees.