Spain is planning a series of measures to tackle the growing housing crisis, including a tax of up to 100 percent on properties bought by residents from outside the European Union.
Spanish Prime Minister Pedro Sánchez announced a plan this week to tackle housing affordability and high rents in the southern European country. He said the overall goal is to provide “more housing, better regulation and more assistance.”
However, it is unclear whether Sánchez's minority coalition plan will pass in parliament.
Here's what's happening:
Housing affordability crisis in Spain
Like most rich countries, Spain is struggling with a growing housing affordability problem. Skyrocketing rents are particularly painful in cities like Barcelona and Madrid, where incomes cannot keep up, especially for young people. Housing prices are also rising steadily, especially in cities and coastal areas.
Rental prices are also influenced by short-term contracts offered mainly to tourists. Spain receives more tourists than almost any other country in the world, with over 88.5 million visitors in 2024. Tourism is one of the country's key economic factors.
The negative aspects of mass tourism sometimes create tensions between visitors and locals, concerned about rising costs, the spread of short-term rentals on platforms such as Airbnb, and the possibility of water connections in some parts of the country, including the Canary Islands and the Canary Islands. Balearic Islands.
Last year, protesters took to the streets on various occasions across the country to express their frustration with tourism growth and high rents. Barcelona City Hall has pledged to completely eliminate all short-term rentals for tourists in the coming years.
“Citizens expect action from us,” Spanish Housing Minister Isabel Rodríguez told reporters on Tuesday.
Peter Waldkirch, director of Abundant Housing Vancouver, tells BC Today guest Dan Burritt how the home exchange tax is related to the province's affordability crisis, while BC Real Estate Association chief economist Brendon Ogmundson details the tax's unintended consequences.
Restricting foreigners from buying houses in Spain
Spain plans to limit the number of houses bought by foreigners by increasing taxes on properties bought by non-EU residents by up to 100%.
Non-EU residents bought 27,000 properties in Spain in 2023, Sánchez said when announcing the plan, “not to live in them” but “to make money from them.”
Sánchez did not provide a timeline or details on how he plans to implement the tax.
Some other proposed measures
Spain plans to build more public housing and allocate around two million square meters of residential land to a newly established public housing agency.
Other proposed measures include higher taxes on holiday rentals, tax breaks and protections for landlords offering affordable housing, as well as changing regulations to speed up construction processes and increase the availability of land for private construction.
Why is housing politically important in Spain?
Rising costs of living have sparked voter discontent in many wealthy countries in recent years, including the United States.
But as one of Europe's leading socialist politicians, the housing crisis is a key issue for Sánchez to address as he tries to keep his left-wing minority coalition afloat after winning another four-year term in 2023.
Moreover, according to the Spanish constitution, all Spaniards have the right to enjoy a “decent and suitable” home. At least theoretically, the government has an obligation to enable citizens to exercise this right.