Spain has long been a haven for British holidaymakers and expatriates, which has led to a large number of homes being purchased, either for use as second homes or as holiday lets. However, proposed changes to Spanish tax laws could put an end to this and make second home ownership in Spain untenable for expats. We discuss the sweeping changes below.
The measure is aiming to restore affordable property to those living in Spain, particularly the Costas, however, this would also impact other areas like the Canaries. It specifically focuses on buyers who are from outside the European Union, which now includes the UK. The measure will see a 100% tax rate applied to anyone under this criterion who buys a home or flat in Spain.
In recent years, property prices in the country have been soaring. In a similar situation to the United Kingdom, this has meant that many areas have been taken up by second homes and holiday lets. In fact, in 2023 an astounding 12,000 Spanish properties were purchased by British buyers.
To further alleviate the housing shortage, the Prime Minister of Spain, Pedro Sánchez, has announced a social housing scheme. This will see hundreds of acres of land currently owned by the state reclassified so that it can be turned into social housing.
This will not just impact those who are buying in Spain, the new taxes are also targeting those who have Airbnb-style holiday lets. Businesses of this nature will be taxed and possibly run under the same legislation as hotels.
This will be a big change for many UK residents who let out apartments in Spain. It is likely that many will sell up and may see them look for other, more affordable properties in countries like Greece or emerging tourist locations like Montenegro.
In Spain itself, this could lead to a glut of property owners who want to sell up quickly. The United Kingdom has companies such as WeBuyAnyHome's sell house fast service. These can provide sellers with a cash offer and a turnaround of close to seven days.
As they will make offers on almost any type of property, they have been a great help in keeping the UK’s property market fluid. Similar companies in Spain can probably expect a boom period, and a raft of firms like this may soon pop up in the wake of the legislation change.
In 2023, more than 27,000 homes were purchased in Spain by non-EU residents, which shows the large scale of the problem. Many of these were also not bought as primary residences but were instead second homes and holiday homes. These measures are just a few steps in a 12-point property plan to ease housing problems.
By no means are the proposals set in stone, as the minority government also faces opposition from its conservative rivals, who believe it is intrusive and does nothing to assist existing tenants. If you are a holiday homeowner in Spain, now may be the time to consider selling.
