Recently, the President of the Spanish Government, Pedro Sánchez, announced a proposal to impose a tax of up to 100% on the value of properties purchased by non-resident foreigners from countries outside the European Union. These statements were made during an economic forum in Madrid on January 13, 2025. This measure, still in the proposal stage, aims to address the difficulty of accessing housing for local residents, according to the Government. 

Context of the Proposal 

The announcement was made as part of a series of measures aimed at improving access to housing in Spain. According to Government data, in 2023, non-residents purchased approximately 27,000 properties in the country. Authorities claim that a significant portion of these purchases was made for speculative purposes, which would justify the need for a measure to limit such acquisitions and prioritize access for residents. 

Potential Scope of the Measure 

If implemented, the measure could affect non-resident foreigners from non-EU countries seeking to purchase property in Spain, as would be the case of UK residents. However, to date, no technical or legal details of its application have been specified, including how the tax would be calculated, whether exemptions would apply, or whether there would be limits based on the type or location of the property. This lack of clarity has led to various interpretations about how the proposal might materialize. 

Compatibility with European Regulations 

A key aspect of this measure is its potential compatibility with European Union legislation, particularly concerning the free movement of capital. Article 63 of the Treaty on the Functioning of the European Union (TFEU) prohibits restrictions on capital movements between Member States and between them and third countries. However, Article 65 allows exceptions under certain circumstances, such as public order, public security, or to ensure compliance with national tax regulations. 

The application of a 100% tax could be interpreted as a significant restriction on the free movement of capital. Furthermore, it could raise questions about its conformity with the principle of non-discrimination if applied exclusively to citizens of third countries. These issues could lead to detailed scrutiny by European institutions and may require adjustments to align with EU regulations. 

Conclusion 

While the proposal announced by the Spanish Government aims to address important challenges in the real estate market, its implementation raises significant legal and economic concerns. The measure is still in its early stages, and it will be necessary to evaluate how it develops, as well as its feasibility in light of national and international regulations. 

In any case, any policy affecting the real estate market must be carefully designed to respect Spain’s international commitments and the fundamental principles of the European Union, ensuring its application is effective and legally sound.