France, Portugal, and Greece are reportedly planning to follow Spain's recent move to impose a hefty housing tax on non-EU residents, signaling potential difficulties for British expats.
Spain recently announced plans to introduce a 100% property tax on non-EU homeowners in an effort to make housing more affordable for locals. Prime Minister Pedro Sánchez revealed the proposal on Monday, sparking concern among British communities living in Spain.
Reports suggest that France, Portugal, and Greece may soon implement similar policies, with a source from the Mirror indicating these countries are also considering measures to deter foreign buyers from inflating local property markets.
Housing Crisis Driving the Policy Shift
France and Portugal have been grappling with housing crises in recent years, as locals face rising costs and dwindling availability. France, in particular, has been actively seeking to curb short-term tourist rentals, but despite regulatory efforts, the number of such properties surged from 300,000 to 1.2 million between 2016 and 2024.
In response to mounting public pressure, Greece recently enacted a blanket ban on short-term rentals in central Athens. The country aims to address concerns about affordability and availability for local residents.
Existing Property Costs and Taxes in Spain
Currently, homebuyers in Spain are subject to additional costs and taxes amounting to 10-12% of the property price, depending on the region. With the proposed 100% tax on non-EU residents, the financial burden for foreign property owners would significantly increase.
Prime Minister Sánchez justified the move, stating it would help ensure greater housing availability for local residents. He criticized the 27,000 non-EU foreigners who bought homes in Spain in 2023, accusing them of speculating rather than residing in these properties. Sánchez highlighted that house prices in Europe have soared by 48% over the past decade, calling the situation "unbearable."
End of Spain’s Golden Visa Scheme
In addition to the new property tax, Spain is set to terminate its 'golden visa' program on April 3. This scheme, which allowed non-EU nationals to obtain residency by investing at least €500,000 (£420,000) in Spanish real estate, was initially introduced to stimulate the economy following the global financial crisis.
According to Sánchez, 94% of these visas were linked to real estate investments in major cities facing severe housing pressures, including Barcelona, Madrid, Malaga, Alicante, Valencia, and Palma de Mallorca. The prime minister emphasized that the government’s priority is now to ensure affordable housing for those who live and work in these cities.
The end of the golden visa scheme and the proposed tax changes mark a significant shift in Spain’s housing policy, potentially setting a precedent for other countries in Southern Europe grappling with similar housing market issues.
Impact on British Expats
These developments represent a fresh blow to British expats, many of whom have historically taken advantage of Spain’s favorable residency schemes and real estate opportunities. With Brexit having ended freedom of movement, the new tax policies could further complicate property ownership and residency for non-EU nationals in these countries.
If France, Portugal, and Greece proceed with similar measures, British expats may face increased financial and bureaucratic hurdles when trying to settle or invest in Southern Europe.
Expats and potential property buyers are advised to stay informed about upcoming policy changes and seek professional advice before making any real estate investments in these countries. Photo by CesareBonaparte, Wikimedia commons.