Two countries Brits could turn to as new Spain law crushes tourist dreams
Share:
Plans by Spain to impose a 100% tax on holiday homes could prompt Brits to turn to Greece and Cyprus instead, say experts. Pedro Sanchez, Spain’s prime minister, has proposed the hefty levy on properties bought by non-European Union residents, as part of efforts to ease a housing crisis. In the wake of Brexit, any such tax hike would hit British buyers too. According to the prime minister’s speech, non-EU residents bought 27,000 properties in Spain in 2023. Brits make up around 8.5% of foreign property deals, followed by Germans.
Unveiling a package of measures, he said: "The west faces a decisive challenge: to not become a society divided into two classes, the rich landlords and the poor tenants.". Prices in places from Madrid to Mallorca has also been driven up by a new wave of buyers from the US, Mexico and Venezuela.
Some experts have questioned whether Mr Sanchez has the political backing to push through the change. But it has unsettled the more than 300,000 Britons who already live in Spain, and will doubtless dent confidence among those who would love to snap-up a home in the sun to escape the UK weather.
Toby Leek, of property professionals’ body NAEA Propertymark, said: “Many Britons will likely be put off by this extreme hike in property taxes and will be looking to other countries such as Cyprus and Greece with lower property tax levels for their dream home move.”.
Spain has been grappling with pressures on housing costs, with rents in major cities like Barcelona and Madrid being a particular concern, alongside rising house prices. Tourism and short-term lets are aggravating housing issues, according to Seila Sanches Lucas, a solicitor at the global firm Broadfield. She said: “The proposal by the Spanish Prime Minister will be concerning for those that have already chosen to retire in Spain and for those considering a retirement in the sun. If adopted, there are many other jurisdictions looking to attract wealthy retirees and investors. For example, Dubai has been called the ‘new Marbella’.”.
