A 100% tax on Brits buying homes in Spain sounds satisfying – but it won’t solve our housing crisis | María Ramírez

3 hours ago 2

Last October, tens of thousands of people marched through Madrid, Barcelona, Valencia and other big Spanish cities demanding affordable housing. Protesters jingled keys to make noise, held signs denouncing “speculators”, and threatened a “rent strike” while calling for action from national and local politicians. They had good reason to be angry.

Housing has become the most pressing concern for Spaniards, according to a December survey by the national polling centre, ranking higher than unemployment and migration. Look at the statistics and it’s clear why. The cost of renting in cities rose by around 30% between 2015 and 2022, forcing young workers to move to the outskirts of Madrid and Barcelona or settle for tiny, often barely habitable flats. In popular tourist regions like Valencia, Alicante and Málaga, rents have surged by 40%. For workers in the Balearic Islands, a commute by plane every day from Mallorca could be less costly than paying rent on Ibiza.

Spain remains a country of homeowners: 75% of people own their homes, according to Eurostat, a higher rate than in Germany, the UK or France. But nearly half of Spanish renters – disproportionately the young – are at serious risk of poverty because they spend over 40% of their income on housing, according to the country’s central bank. The demand for housing also continues to grow amid Spain’s thriving economy: GDP grew around 3% last year, partly driven by public investment and migration waves that have reshaped cities nationwide. Over one million people from Latin America live in Madrid now, a dramatic increase from just 81,000 inhabitants 25 years ago.

This is the context for the latest announcement by the prime minister, Pedro Sánchez, who has proposed measures to curb house prices and increase the supply. Among these proposals, still subject to negotiation and parliamentary scrutiny, is a plan to tax up to 100% of the real estate value of houses for non-EU buyers who are not residents of Spain. Sánchez argued that those buyers contribute to rising housing prices as they buy, he said, to “speculate”. But he did not elaborate to whom he was referring or what the measure would look like.

Spain’s central bank recently pointed to an increased number of purchases by resident and non-resident foreigners. This week, the president of the conservative People’s party, Alberto Núñez Feijóo, claimed that the rising prices in Madrid were being driven by wealthy Venezuelans, Colombians and Mexicans.

While this may hold true for some neighbourhoods in Madrid, though, the largest group affected by the Spanish government’s measure would be Britons following Brexit. Hence the anxiety in the British press as they report on these “exorbitant” tax proposals.

The policy might alleviate the pressure in a few holiday areas, but experts have also called it a “drop in the ocean” and said it would be ineffective because companies or EU-based speculators could still buy up properties. Other Sánchez proposals to limit short rentals or promote public housing may be more significant. But whether he manages to pass any of these measures with his precarious majority remains to be seen.

Spain’s prime minister hasn’t fulfilled previous promises to control prices and build thousands of apartments, including public housing – and for any action to have an impact he’ll need to coordinate with regional authorities. Regional politicians in Spain often talk admiringly about Vienna and its housing planning model, but they lack the ambition, investment or even powers to make major reforms. Making British visitors pay more may bolster Treasury revenues and deter some – not the super-rich – from buying houses. But it is far from a solution to Spain’s housing pressures. Millions of houses need to be built.

The People’s party has proposed its own measures, focusing on reducing taxes, building new homes and subsidising young buyers. But, in the cities and regions where it’s in power, it has largely resisted implementing the existing housing law, which limits price increases in high-demand urban areas. Conservative local politicians have been slow in applying regulations on short-term tourist rentals, too. In a recent editorial, El País criticised measures from both political parties as “timid”, as did housing experts across the board.

Spain’s decentralised political structure makes serious housing reform complicated. Measures require coordination between the central government, regional administrations and local councils, which share powers and are often controlled by competing political parties. This fragmentation has led to a focus on short-term political gains rather than comprehensive solutions to long-term challenges.

The right to “decent and appropriate housing” for all is even written in the 1978 Spanish constitution, but almost 50 years later it’s far from a reality. Taxing British housebuyers might be eye-catching, but it won’t make things easier for most of those struggling to find a place to live.