On January 25, 2025, Spain's Socialist Prime Minister Pedro Sanchez announced a series of measures aimed at addressing the country's ongoing housing crisis. Central to these measures is a proposed 100 percent tax on the value of homes purchased by non-European Union residents, a move intended to deter foreign investment in the housing market.
Sanchez emphasized that housing should prioritize Spanish citizens and migrants contributing to the country. The proposed tax will impact overseas buyers who accounted for 15 percent of real estate purchases in the third quarter of 2024. The Prime Minister also suggested higher taxes on holiday rentals to ensure they are taxed equitably with hotels.
In total, Sanchez outlined 12 initiatives to improve the strained housing market, which has seen some of the highest price increases in Europe, with an 8.3 percent rise last year. He highlighted the need for 600,000 new homes by 2025, while only 90,000 are currently being constructed annually.
Additionally, Sanchez announced plans to transfer two million square meters of land to a public company for the construction of affordable social housing, a sector that currently represents just 2.5 percent of Spain's housing market.
Other proposals include combating fraud in the holiday rental market and eliminating the golden visa program, which granted residency to wealthy non-EU investors purchasing real estate. The timeline for implementing these measures remains unspecified, and they require approval from Spain's parliament.
The housing crisis has led to a 24 percent increase in homelessness since 2012, with rising rents pushing many residents out of the market. In urban centers like Barcelona and Madrid, average rents have surged significantly, with a one-bedroom apartment in Barcelona's city center costing around $1,313 per month.