In the sun-drenched corners of Spain, where millions of tourists flock to enjoy its pristine beaches, ancient history and vibrant culture, a storm is brewing in the world of property investment.
Spain’s socialist Prime Minister Pedro Sánchez has proposed a controversial plan to impose a 100 per cent property tax on non-EU nationals looking to buy in the country – with Brits to be the hardest hit.
The move, aimed at addressing Spain’s growing housing crisis, would force British sunseekers to pay double to buy property in Spain and would shatter the dreams of people hoping to relocate, while the owners of existing homes fear they may struggle to find a buyer.
A Place in the Sun presenter Laura Hamilton, who helps Brits find their dream home abroad and recently purchased a property of her own in Mallorca, branded Sanchez’s plan ‘crazy’ – but said it was already backfiring for the Spanish PM.
‘I just think it’s bonkers. Bonkers!’ Laura told MailOnline.
‘It can’t happen. It’s crazy. Nothing at the moment has been confirmed, so really it’s all speculation, but it’s scaremongering and making people worry.’
While Spain’s housing market has been under pressure for years, with locals struggling to find affordable homes amid rising rents, Laura argues that the proposed tax is not the right solution.
‘It’s a worldwide problem: The housing crisis is happening everywhere in the EU. It’s not just Spain,’ she said. ‘I mean, we’re talking about housing in the UK as well, it’s the same issue.’
A Place in the Sun presenter Laura Hamilton says Spain’s planned tax rise on second homes for Brits won’t work
Tenerife locals hold placards raising concerns about the impact of mass tourism, October 2024
Prime Minister Pedro Sanchez has vowed to ban non-resident Brits from buying homes in Spain as he desperately tries to tackle the country’s housing crisis
Laura believes the 100 per cent property tax would likely do more harm than good – and thinks it is unlikely to become law.
And remarkably she says the proposal has already backfired for the Spanish PM, as Brits and other non-EU investors rush in to snap up properties before any new law comes into force.
‘We’ve been speaking to local estate agents in Spain and the Balearics. They were all saying that because it’s being reported that there’s a chance of a tax increase for non-EU property buyers, it’s actually driven more interest,’ Laura said.
‘People are thinking, “Right, we need to buy now, just in case.” It’s having the opposite effect of what they actually want it to have.’
House-buyers in the country are currently expected to pay costs and taxes worth between 10 and 12 per cent of the price of the house, depending on where it is.
Any change to those rules would have to be approved by Parliament.
‘I’m of the opinion that it’s not going to happen. It would be very difficult for him [Pedro Sánchez] to pass,’ Laura said.
‘The other political parties won’t support it. There’s just too much to get it through.’
Laura’s concerns are not unfounded. According to property market experts, the tax could lead to a decline in foreign investment, particularly from non-EU nationals, who already face stringent visa and residency requirements.
Laura Hamilton is renovating her own home in Mallora after purchasing it last year
Demonstrators march shouting slogans in downtown Barcelona, Spain, Wednesday, June 19
The global demand for Spanish property has been fuelled by non-EU buyers, particularly from the UK and other countries outside the European Union.
While it’s true that Spain has seen a surge in foreign investment, especially in places like the Costa del Sol and the Balearic Islands, Laura believes the market is still largely driven by buyers who want to make a positive contribution to the local economy – not by speculators looking to exploit the system.
‘If you’re just looking to buy one property, you’re investing in the country and you’re bringing positivity to that then I think any kind of massive increase is harsh,’ she said.
Laura also expressed concern that imposing such a heavy tax would push foreign buyers to look elsewhere, potentially damaging Spain’s reputation as a desirable place to invest.
‘There are other countries out there where you can buy holiday properties. If tax rates are increased, people will look to places like Portugal or France, countries where there are already attractive property options,’ she said.
Even in the US, where property prices have been rising in places like Florida and California, many international buyers are drawn by less restrictive policies.
Beyond the political and economic implications of the tax, Laura is concerned about the broader context – the global housing crisis.
In 2023 alone, non-residents from outside of the EU bought 27,000 houses and flats in Spain, ‘not to live in them, but mainly to speculate’, Pedro Sanchez said (Altea pictured)
Laura also expressed concern that imposing such a heavy tax would push foreign buyers to look elsewhere
‘Everyone is struggling with the cost of housing,’ she said, referencing the crisis both in Spain and in the UK.
‘The UK property market is just as tough. I bought my first house at 19, and it’s so different now. The cost of living, the cost of housing, it’s all gone up.’
Her comments highlight the fact that the housing crisis isn’t isolated to Spain or even Europe.
However, the idea of taxing foreign property buyers to solve the housing crisis in Spain is overly simplistic.
The country is grappling with rising housing costs, but placing blame solely on foreign buyers is misguided.
‘So many countries overseas rely on tourism. They need us! It’s absolutely not about tourists,’ Laura said.
The A Place in the Sun presenter herself recently joined the ranks of foreign property owners in Spain, buying a house in Mallorca.
‘I bought my house in Mallorca last August. It’s a big renovation project on a grand design scale,’ she shared.
‘Half of it is currently demolished, and I’m in the process of putting it back together. I wish I’d bought my house in Mallorca long ago.’
Ultimately, she remains optimistic about the future of Spain’s property market, but only if the government refrains from pushing through drastic measures like the proposed 100 per cent tax.
‘It’s all speculation at the moment,’ she said. ‘It’s scaremongering. Until anything’s actually passed, you shouldn’t be worried.’
The 100 per cent tax would put rocket boosters under Spain’s famously affordable property prices, with a five-bed coastal villa in Andalucía that’s currently being advertised for just under £400,000
For now, potential property buyers in Spain, particularly non-EU nationals, are left waiting for clarity.
‘It’s a crazy idea, and I can’t see it happening. I think people should do their research, get good advice, and if you want to buy abroad, just do it,’ Laura said.
Spain is one of the worst hit by demand for vacation properties, welcoming more than 88.5 million visitors in 2024 alone. ‘Overtourism’ is felt by locals desperate to afford their own homes, increasingly taking to the streets to demand action. But Spaniards are not alone in their battle for affordable housing and sustainable tourism practices.
In Portugal, similar problems with short-term holiday rentals and a shortage of affordable housing has seen residents mobilise in cities across the country with banners decrying: ‘I have to choose between paying for a house or eating.’
France took steps late last year to temper growing frustration over the availability of housing, passing a long-awaited bill to tighten regulations on the short-term tourist rental market. The number of such rentals grew from 300,000 to 1.2 million between 2016 and 2024.
Tourists are also flocking further east in search of less expensive accommodation and properties to buy as summer homes or medium-term investments. The Greek government was pressed to act last year, announcing a sweeping ban on short-term rental licences in three central districts in Athens due to ‘a lot of pressure on society’.
Sanchez noted that in 2023 alone, non-residents from outside of the EU bought 27,000 houses and flats in Spain, ‘not to live in them, but mainly to speculate’.
He said this was ‘something that, in the context of the shortages we are experiencing, we cannot afford’.
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