A 100% tax on Brits buying houses in Spain sounds satisfactory – but it won’t solve our housing crisis Maria Ramirez

LTens of thousands of people in October marches through Madrid, Barcelona, ​​​​Valencia and other major Spanish cities that demand affordable housing. Protesters jingled keys to make noise, held signs denouncing “speculators,” threatened a “rent strike,” and called on national and local politicians to take action. They had every reason to be angry.

Housing has become the most pressing concern for Spaniards, according to a December survey the national polling stationand is therefore higher than unemployment and migration. Look at the statistics and it’s clear why. The rental costs in cities increased by around 30% between 2015 and 2022, forcing young workers to move or settle in the outskirts of Madrid and Barcelona tiny, often barely habitable Apartments. Rents have risen by 40% in popular tourist regions such as Valencia, Alicante and Málaga. For employees in the Balearic Islands, a ride by plane Every day from Mallorca could be cheaper than paying rent in Ibiza.

Spain remains a country of homeowners: 75% of people own their own home, according to Eurostata higher rate than in Germany United Kingdom or France. But almost half of Spanish renters – especially young ones – are at serious risk of poverty as they spend over 40% of their income on housing the country’s central bank. The demand for housing also continues to grow given Spain’s flourishing economy: GDP grew around 3% last yearpartly driven by public investments And waves of migration that have transformed cities across the country. Over a million people from Latin America live in Madrid today a dramatic increase from just 81,000 residents 25 years ago.

This is the context for the recent announcement by Prime Minister Pedro Sánchez, who proposed measures to reduce property prices and increase supply. Among these proposals, still subject to negotiations and parliamentary scrutiny, is a plan to tax up to 20% 100% of the property value of houses for non-EU buyers who are not residents of Spain. Sánchez argued that these buyers were contributing to rising property prices by buying to “speculate.” However, he did not elaborate on who he was referring to or what the measure would be.

Spain’s central bank recently pointed this out increased number of purchases of 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 pushed by wealthy Venezuelans, Colombians and Mexicans.

While this may be true in some areas of Madrid, the… largest affected group According to the Spanish government, the British would be after Brexit. Hence the concern in the British press when reporting on these “exorbitant” tax proposals.

The policy could ease the pressure in some resort areas, but experts have also described it as “Drops in the oceanand said it was so ineffective because companies or speculators based in the EU could still buy up properties. Sánchez’s other proposals to limit short-term rentals or promote public housing could be more important. But whether he will be able to pass any of these measures with his precarious majority remains to be seen.

The Spanish prime minister has reneged on previous promises to control prices and build thousands of homes, including social housing – and for any measure to be effective, he must coordinate with regional authorities. Regional politicians in Spain often speak admiringly of Vienna and its housing model, but lack the ambition, investment or even power to carry out major reforms. If British visitors pay more it could boost Treasury revenues and deter some – not the super-rich – from buying homes. But it is far from a solution to the housing pressure in Spain. Millions of houses have to be built.

The People’s Party has proposed its own measures focused on cutting taxes, building new homes and subsidizing young buyers. But in the cities and regions where it is in power, it largely resists implementing existing housing laws that limit price increases in high-demand urban areas. Conservative local politicians have also been slow to implement regulations for short-term tourist rentals. In one current editorialEl País criticized the actions of both political parties as “timid,” as did housing experts across the board.

Spain’s decentralized political structure makes serious housing reform difficult. Action requires coordination between central government, regional administrations and local councils, which share powers and are often controlled by competing political parties. This fragmentation has led to an emphasis on short-term political gains rather than comprehensive solutions to long-term challenges.

The right to “decent and adequate housing” for all is even enshrined in the Spanish Constitution of 1978, but almost 50 years later it is still far from a reality. Taxing British home buyers may be eye-catching, but it won’t make things any easier for most people struggling to find housing.