Housing shortages and rapid price increases have sparked public uproar in Spain, prompting the government to propose decisive measures. A new tax targeting homes purchased by non-European Union residents seeks to address the country's entrenched housing crisis. The initiative comes as housing prices across Europe have surged by 48% over the past decade, starkly contrasting with household income growth, which has lagged significantly behind.
Spain's housing market has been strained by the growing phenomenon of holiday home ownership and the proliferation of holiday rentals. In 2023, non-EU residents acquired 27,000 apartments in Spain, contributing to the scarcity and driving up prices. Spanish Prime Minister Sanchez highlighted the pressing nature of this challenge.
"The West faces a decisive challenge: not to become a society divided into two classes, that of rich owners and poor tenants." – Sanchez
Tourism plays a pivotal role in Spain's economy, accounting for over 13% of the GDP and creating approximately three million jobs. In 2024, Spain welcomed an unprecedented number of international tourists, surpassing 88.5 million. The influx of visitors continues to fuel economic growth, as emphasized by economic analyst Maartje Wijffelaars.
"Tourism is not only driving consumption expenditure, but high accommodation occupation rates are also driving record investments in hotels." – Maartje Wijffelaars
However, this tourism boom has exacerbated the housing crisis, prompting the government to consider taxing tourism apartments as businesses. Additionally, a 100% tax on homes bought by non-EU residents seeks to deter speculative buying. Prime Minister Sanchez elaborated on the rationale behind these proposals.
"Non-residents of the European Union bought 27,000 apartments in Spain [in 2023]. They did so not to live, but to speculate, to make money with them, something that in the context of scarcity we cannot afford." – Sanchez
The Spanish government aims to make housing more accessible and affordable nationwide. This bold tax initiative is intended to curb speculation and foster an environment where foreign investment supports innovation and job creation rather than treating properties as mere financial assets.
"The progressive coalition government has always embraced foreign investment, but we want it to be productive, encourage innovation and create new jobs, not serve for speculation, as if it were a financial asset or bank deposit." – Sanchez
Despite these challenges, Spain's economy continues to exhibit resilience. Economic forecasts project GDP growth to moderate slightly in the coming years but remain robust compared to the broader eurozone. Maartje Wijffelaars provided insights into the growth outlook.
"We project GDP growth in Spain to soften somewhat going forward, as growth in the tourism sector is projected to lose some steam. But growth is expected to remain strong and higher than in the eurozone in the coming quarters and years, coming in at 2.7% [in 2024], 1.9% in 2025, and 1.5% in 2026." – Maartje Wijffelaars