Madrid dismisses Balearic quest to exclude foreign buyers from housing market

The Spanish government in Madrid has made clear it will not support Balearic attempts to exclude foreign buyers from the local housing market, which would need approval from the EU.

The Balearic regional government has been making noises about excluding non-resident buyers from the local housing market, blaming them for driving up housing costs on the archipelago. 

Excluding buyers from other EU countries would require some sort of legal formula sanctioned by the EU, and support from Madrid to get it done, assuming it’s even possible. Now the central government in Madrid has made clear that will not be forthcoming.

In a written answer to a question in the Congress in Madrid (the lower house of parliament) presented by deputies from the Podemos party (part of the government coalition) the Spanish government has rejected the idea, pointing to EU articles that prohibit all restrictions on the free flow of capital within the EU.

Undeterred, Podemos have renewed their appeal to their Socialist coalition partners to fight for a ‘Balearic exception’ allowing the exclusion of non-residents for the Balearic housing market, whilst the Balearic government continues to call for special treatment from the EU. 

As I have explained elsewhere the idea of excluding foreign buyers from the Balearic housing market never had any chance of success, and the Balearic government is just showboating for electoral reasons, so the lack of interest from the Spanish government doesn’t really change anything. 

However, it does underline how populist politicians in the Balearics are much happier tilting at windmills than doing anything to actually fix the housing problem, like building more affordable homes.

“It’s difficult to explain how our leaders in the Balearics thought they could get an exception in our community to restrict purchases by non-residents,” says the ABINI association of real estate professionals in the Balearics in a statement. “There is no justification for going against EU norms, and furthermore we are absolutely certain that limiting and prohibiting is not going to solve the problem of housing scarcity. Quite the opposite, it would provoke a stampede of possible investors for the exit and, even worse, workers from other territories unable to buy a home because they haven’t lived in the Balearics for at least five years.”