Brits Face Massive New Spain Tax as Situation Branded ‘Not Fair’
New tax reforms in Spain could hit British property buyers hard, raising concerns
Spain, Brits, Property Tax, Pedro Sánchez, Housing Market
Madrid: So, it looks like Brits wanting to buy a home in Spain are in for a rough ride. The Spanish government is planning to introduce some hefty taxes that could equal the full price of the property. Can you believe that?
Under these new rules, if you’re a non-EU citizen without residency in Spain, you might have to cough up taxes that are 100% of the property’s value. That’s a big hit! Official stats show that the number of Brits living in Spain has gone up a bit over the years, but this could change things.
Last year, there were about 12,470 property sales involving British buyers, which is down by 16.5% from the year before. Pedro Sánchez, the Spanish Prime Minister, announced this in Madrid, saying they want to prioritize homes for residents over foreign buyers.
It’s interesting to note that one in five homes sold in Spain goes to foreigners, many of whom don’t live there. Sánchez mentioned that last year, non-residents bought around 27,000 homes, mostly for speculation. Now, they want to limit that.
This news comes as house prices are climbing, especially in Madrid. To tackle rental issues, Sánchez is also looking to support state-guaranteed leases and allocate government properties through a new housing body. Plus, he’s planning to raise taxes on holiday rentals to make them contribute more.
He pointed out that it’s not fair for those with multiple short-term rentals to pay less tax than hotels. This move aligns with a new EU policy pushing for VAT on online marketplaces, as Spanish hostels currently enjoy a lower VAT rate.
With rising rents causing urban gentrification, landlords are opting for more profitable short-stay rentals. There’s even scrutiny on Airbnb for not cleaning up misleading listings on its site.
In a bid to help, property owners in high-rent areas could get a full tax exemption if their income matches the government’s rental index. They’re also looking to boost social housing and hand over about 500 acres of land to a new state housing agency.
However, these proposals are facing backlash. The right thinks there’s too much regulation, while the left feels they’re being too lenient on property owners. The national bank has pointed out that the rental market needs intervention, as many are struggling with some of the highest rents in the EU.
All this could lead to some serious economic and social issues if people can’t keep up with their rent. It’s a tricky situation for sure!