Spanish leader wants to ban all non-EU foreigners from buying investment homes

Non-EU house buyers could be banned outright from purchasing property in the Spanish real estate market if new proposals by Spain’s Prime Minister Pedro Sanchez go ahead. The latest suggestion comes off the back of a measure put forward just days ago to impose 100% tax on house purchases by those from outside the bloc.

Since Brexit, “non-EU” includes people from Great Britain, who are known to be particularly fond of the idea of living in sunnier climes. That is backed up by figures from the Spanish housing registry, which show Britons made up 9.5% of the total non-Spanish housing transactions in 2023 – a year in which the number of Brits registered as living in Spain increased to 284,037. However, the new, harsher regime, if adopted, would only apply to non-EU citizens intending to buy homes in Spain but not live in them.

“We are going to propose to ban non-EU foreigners from buying houses in our country, in cases where neither they nor their families reside here and they are just speculating with those homes,” Sanchez told a gathering of his Socialist party in the western Extremadura region.

Anti-foreigner sentiment

The reason for the extreme proposal is the increasingly volatile conflict between Spanish locals and outsiders, especially tourists, who are blamed for pushing property prices too high for Spaniards to afford.

The last two years have seen a proliferation in anti-tourism protests across the southern European nation and its islands. Sunbeds have been slashed, anti-tourism graffiti and signage has appeared, and numerous protests and marches have taken place to highlight the impact of short-term holiday rentals dominating the housing market and pushing locals out.

Chilling effect

To go ahead, the measure would need to be approved by parliament; not an easy feat since Sanchez does not have a majority. A source close to Sanchez has said that managing the situation through taxes remains the real intention.

But whether the measure is implemented or remains just a headline-grabbing move to assuage Spanish anger, it could still have a chilling effect on the country’s property market, experts warn. “All factors related to regulatory and juridical changes are discouraging investors,” said Paloma Relinque, executive corporate director of real estate company CBRE, reported in The Independent.

Likewise, the Associated Press spoke to Joan Carlos Amaro, a property market analyst and economics professor at the Esade Business School in Barcelona, who said that disincentivising people from looking at Spanish real estate, whether to live in or to rent out, could be counterproductive. “Anything that puts up barriers and stops the market from functioning ends up hurting everyone,” he said. “These foreigners that come, they spend money, the houses they live in have to be built and that creates jobs.”