Spain's Bold Move to Tackle Housing Crisis: The Battle Over EU Property Purchases

Spanish Prime Minister Pedro Sanchez plans to restrict property purchases by non-EU buyers as a measure to regulate housing prices. The proposal includes potential bans and tax increases on foreign acquisitions to combat speculation. Despite potential reputation damage, the government aims to address housing shortages.

The Spanish government, led by Prime Minister Pedro Sanchez, is considering bold measures to address the country's escalating housing crisis, including limiting property purchases by non-EU citizens. The initiative is part of a broader strategy to control housing prices and reduce speculative investments.

At a political rally in Plasencia, Sanchez emphasized the need to curb non-EU foreign banks' purchases of houses as these buyers are perceived to speculate. Alongside proposed bans, there is a discussion about imposing up to 100% tax on such transactions for non-residents. These proposals come amid a challenging legislative landscape for Sanchez's minority government.

Despite concerns about the potential negative impact on Spain's reputation among international investors, officials cite the urgency of the domestic housing deficit, expected to reach half a million homes by year-end, as a driving force behind these measures. The controversy unfolds as regions grapple with tourism impacts and gentrification, especially in urban and beach areas.

(With inputs from agencies.)