1. Change the laws for foreigners: Reduce taxes, create a system of accountability, remove the mystery of pricing and taxes, create some legal stability and a system for quick recourse for problems.
2. Create a ‘system’ to make it easy for foreigners to purchase these properties – having all papers in order ready to sell, good mortgages available etc, all without fleecing the foreign buyer. Reduce the total costs for buying to 5%. All costs of the sale and all annual costs of ownership should be listed. A one-stop, simple sign the contract after reading all of the disclosed costs process. No visits to city hall, no visits to the bank, no lawyers, etc.
3. The government, working with banks, etc, then should launch an international advertising campaign to sell the properties to foreigners looking for vacation or retirement homes in Spain. Only sell to people who demonstrate that they can pay the mortgage. Provide an incentive – for people who buy, upon completion of the sale, give them one round-trip air ticket to/from their home city as an incentive (this isn’t that much money and incentives really do motivate people).
4. Revenues from the sales should go to pay debts and restore services. A modest profit could be allowed for those involved, maybe splitting 10% of the sale price, but with so many sales, this would be a tidy profit.
5. Live happily ever after with reduced debt, increased tax revenues from IBI and the increased revenues from people spending more money in Spain.
Yes, this is a fairy tale, but only because we are talking about Spain. A country with a competent government could make this work.