Spain Property Tax: Far from Certain

Spain’s real estate market has been buzzing with uncertainty following Prime Minister Pedro Sánchez’s proposal to double property tax for non-European buyers. While the announcement has caused concern among international investors, the question remains—will this law actually pass?

The Controversial Proposal

On January 13, 2025, Sánchez unveiled a series of housing reforms aimed at improving access to homeownership for Spanish residents. Among these initiatives was the most contentious measure: a 100% increase in property transfer tax (ITP) for non-European buyers.

If approved, this doubling of taxes would significantly impact property transactions. For instance, a British buyer in Andalucía —currently paying a 7% transfer tax —could suddenly face 14%, raising the cost of purchasing property substantially.

Will This Become Law?

Despite the anxiety surrounding this proposal, it is far from a done deal. Sánchez’s government operates with a slim parliamentary majority, meaning passing such a law would require broad political support—something he may struggle to secure.

Furthermore, Spain’s real estate sector is pushing back against the tax increase, arguing that foreign buyers contribute positively to the economy. Real estate agencies, legal experts, and economic analysts have expressed concerns that the law could deter international investment and negatively affect property values.

Why Is Spain Considering This Tax?

The government claims that international investors —particularly non-EU buyers—are inflating housing prices, making homeownership increasingly difficult for Spanish citizens. The proposed tax is meant to curb speculation and create more opportunities for locals to access affordable housing.

However, critics argue that the real issue lies in housing supply and rental availability rather than foreign investment. Restrictive zoning laws, slow construction approvals, and short-term rental demand have all contributed to Spain’s housing crisis.

What Should Buyers Do?

At this stage, the proposed tax is still uncertain. Investors should monitor legal developments closely while consulting with real estate professionals to understand potential risks. Until the law is officially passed, Spain remains open to foreign buyers —but uncertainty lingers.

While fear of the unknown has already affected market sentiment, the real test will be whether Sánchez can secure the votes needed to make this proposal a reality. Until then, Spain’s property tax debate remains ongoing.