Just weeks after announcing his plans to introduce a controversial property tax on sales to non-resident and non-EU buyers, Spanish Prime Minister, Pedro Sanchez, has been forced to defend his decison.
Mr Sanchez was pushed to confront critics of the new hefty tax increase at the World Economic Forum this week.
This tax is expected to principally hit British and American property buyers in Spain – who are among the biggest buyers of Spanish property.
The socialist PM announced the “unprecedented” tax in an attempt to get a grip on the housing crisis in Spain.
The reform would charge non-EU citizens who are not resident in the country a 100% tax when buying property.
Non-EU residents bought 27,000 of 700,000 properties in Spain in 2023, he told an economic forum in Madrid, “not to live in” but “to make money from them”.
“Which, in the context of shortage that we are in, [we] obviously cannot allow,” he added.
Mr Sanchez has also faced criticism from a group that supports Brits in Spain, who revealed that the UK’s withdrawal from the EU is to blame for foiling their hopes of moving to warmer climates.
“Many British nationals on lower incomes, who had hopes of retirement on the Costas, have already had their dreams shattered [by Brexit],” Sue Wilson, head of Bremain in Spain which has 6,000 members, told The Times.
“These new measures – assuming they are passed by parliament – will only add to the barriers we face in Europe as non-EU citizens.”
The opposition Partido Popular (PP) has also said that they will not allow the tax in the Spanish regions where they govern, which includes the Balearic Islands.
Last year, tens of thousands of locals in many tourist hotspots across the country – from Barcelona to Malaga and the Canary and Balearic Islands – took to the streets on several occasions last year to protest the current tourism model and demand the government take action to halt the growing affordable housing crisis.
Currently, landlords in Spain are opting for short-term rentals to tourists over long-term rentals to locals because they can generate more income.
Tens of thousands in Barcelona protested in November over the increasing prices of renting an apartment in an area that has become such a popular tourist destination. They held signs reading: “Fewer apartments for investing and more homes for living”.