Spain's Housing Reforms: Tackling Affordability with New Measures

Spain plans significant reforms to address housing affordability, including taxing property purchases by non-EU residents up to 100%. Spearheaded by Prime Minister Pedro Sanchez, the proposal seeks to regulate high rents driven by tourism, improve housing availability, and alleviate financial strains on residents in cities like Barcelona and Madrid.

Spain is set to introduce a series of measures to combat its escalating housing crisis, which includes implementing an up to 100% tax on properties acquired by non-European Union residents. This strategic policy, announced by Prime Minister Pedro Sanchez, aims to alleviate housing affordability and soaring rental prices in key cities.

The initiative emerges amid rising accommodation costs and mounting public discontent, particularly in urban areas such as Barcelona and Madrid, where local incomes lag behind rental hikes primarily spurred by tourism. Spain's popularity as a destination, with 88.5 million visiting in 2024, exacerbates the issue as short-term tourist rentals proliferate.

Aside from taxing foreign property purchases, the government proposes higher levies on holiday rentals and incentives for landlords providing affordable accommodation in expensive locales. While Sanchez has not detailed the timeline for the new tax regulation, it aligns with his political mission to secure support from his leftist coalition amidst growing economic strains.

(With inputs from agencies.)