While the Spanish government's proposed 100% tax on property purchases by non-EU non-resident buyers is framed to address housing shortages, I believe there isn't sufficient evidence to suggest this policy would achieve its intended goal. 

The properties typically acquired by international buyers are often located in areas with low population density, such as Málaga province, Tenerife, or Ibiza—places where the general population does not seek primary residences due to their tourism-oriented nature. We also see that these properties are usually at a higher price point per square meter than the market average and are often purpose-built as second homes or high-end investments. For example, the average US or UK luxury buyer searches for a property of €2.5m, 350 sqm, priced at €7,000 per square meter. 

Instead of creating scarcity in the residential market, these investments have historically contributed positively to Spain's economy, which already taxes real estate at double the share of GDP compared to the EU average. These investments stimulate local industries, from real estate development to construction, and support tourism by adding high-quality housing to the rental pool. These international buyers also bring significant indirect economic benefits through local spending and job creation. 

That said, this proposed tax is part of a broader package of measures to address Spain's housing crisis. While the effectiveness of this specific tax remains questionable, other proposals within the package could have a more direct impact on housing availability. For instance, increasing taxes on tourist rentals or limiting short-term rental activity in urban centers and high-demand neighborhoods could help alleviate pressure on the residential rental market. We know that reports consistently show that short-term rentals have driven up housing costs in cities like Barcelona and Madrid, where they compete directly with long-term residential demand. 

In general, targeted regulations incentivizing affordable housing development or rehabilitating unused properties for long-term rental use would provide a more sustainable approach to addressing housing shortages. Policies encouraging collaboration between public and private sectors—such as subsidizing affordable housing projects or repurposing underused properties—will likely have a more meaningful impact in areas where housing demand is most acute. 

However, it is important to note that this tax is still in the early stages of discussion, and it remains unclear whether it will be implemented or in what form. Hopefully, public and private stakeholders can participate in shaping how these measures are finalized. 

Spain has long been a welcoming market for global property buyers. I believe collaborative solutions that balance affordability with economic growth will effectively secure a sustainable housing future.  

JamesEdition Data:  

Data for average inquiry during Q4 in Spain per buyer country (USD):  

The United Kingdom and the United States are the top two countries showing the most interest in Spanish properties, with the highest inquiry volumes. The table highlights key data on property interest from these buyers. On average, UK buyers are looking at properties with a listing price of $2.64 million, larger homes of 362 square meters, and a price per square meter of $7,305. US buyers are exploring slightly less expensive homes, averaging $2.27 million, with an average size of 333 square meters and a price per square meter of $6,812. Overall, the average price per square meter for all inquiries is $7,070, showing strong interest from international buyers in Spain. 

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For more Information and a list of Spanish Property Listings visit: https://www.jamesedition.com/real_estate/spain 

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