Spain appears set on making non-EU residents, such as Britons, pay for the country’s housing crisis.
The Socialist Parliamentary Group (PSOE) has introduced a bill aimed at promoting affordable rental housing. Among its key measures are raising VAT on tourist flats to 21% to reflect their economic activity and increasing taxes on REITs (real estate investment trusts) and vacant properties.
Housing and Urban Agenda Minister Isabel Rodríguez announced these details at a press conference, explaining that the fiscal package fulfils part of the government’s early-year commitments outlined by Prime Minister Pedro Sánchez in a set of 12 measures to improve housing accessibility, according to idealista.
Regarding the timing of the measures, the Minister of Housing stated that the PSOE plans to use the “first available opportunity” within the Congress of Deputies’ legislative agenda, aiming for the first half of June. This is not the time for half-measures or mere regulations; sometimes prohibition is necessary. This is not about superficial fixes – we need to act decisively,” Rodríguez emphasised.
The bill, which requires majority approval in the Lower House and subsequent amendments, introduces a new state tax aimed at discouraging property purchases by non-EU citizens and non-resident foreigners through the property transfer tax. This new tax will not be passed on to the autonomous communities to “avoid double taxation,” according to the PSOE.
It will apply to real estate purchases across Spain (excluding the Basque Country and Navarre), covering all properties except real estate security rights, but will only affect individuals and companies that are not residents within the European Union.
The proposal excludes business owners and professionals carrying out their activities, unless their activity is exempt from VAT, in which case, they would be liable for this new tax. One of the key measures in this bill to promote affordable housing rentals is the increase of VAT on tourist flats to 21%, ensuring they are taxed as a genuine economic activity.
Following a meeting with PSOE representatives, Housing Minister Isabel Rodríguez stressed that this initiative fulfils the entire package of measures announced by Prime Minister Pedro Sánchez last January. She urged parliamentary groups to support the bill, affirming that the Socialists “will actively work on these measures.” Rodríguez acknowledged that while her department has already introduced steps to encourage affordable housing, “the government’s efforts also require a solid legal framework.”