Mark Stücklin
The Spanish government still hasn’t managed to muster the parliamentary support it needs to push through its controversial plan to slap non-EU buyers with a 100% property tax.
Pedro Sánchez first floated the idea back in January, initially pitching it as a punitive levy equal to the value of the property. A few weeks later the rhetoric hardened into talk of an outright ban. Then in late May the Socialist party tabled a draft law in Congress reverting to the 100% tax model, but since then… radio silence.
Stuck in political limbo
The proposal was bundled into a wider housing package that also included carrots for landlords who offer cheap rents, new tax treatment for SOCIMIs (listed property investment companies), and higher VAT on tourist apartments. Even so, the foreign-buyer tax has proved a bridge too far. Conservative parties are hardly going to back a new property tax, while left-wing groups argue it doesn’t go far enough. The result is gridlock.
Regional authorities haven’t helped clarify matters. The Catalan parliament passed a motion in June calling for restrictions on foreign non-resident buyers, while in the Canary Islands local politicians are studying measures of their own. But without a national consensus in Madrid, none of this amounts to much.
European law looms large
Even if Sánchez somehow cobbles together a majority in Congress, Brussels would likely have the final say. The European Court of Justice has a long record of striking down attempts to discriminate against foreign buyers, citing the free movement of capital. Austria and Hungary both tried and failed with similar measures in the past.
So, nine months after the Prime Minister’s grand announcement, the flagship idea remains stuck in the starting blocks. For now at least, non-EU buyers can relax: Spain may talk tough on foreign demand, but turning that talk into law is another matter entirely.
