Spain's Housing Crisis: Golden Visa End and 100% Tax on Non-EU Property Buyers

In a significant move to address Spain's escalating housing crisis, the Spanish government, led by Prime Minister Pedro Sánchez, has announced a series of drastic measures that are set to impact expats and foreign property buyers profoundly.

End of the Golden Visa Program

One of the most notable changes is the impending end of Spain's Golden Visa program, which has been a popular route for non-EU residents, including Britons, to gain residency in Spain. Launched in 2013, the Golden Visa required an investment of at least €500,000 in Spanish property, offering residency with minimal stay requirements. However, due to concerns that this scheme was pricing local residents out of the housing market, the Congress of Deputies voted to scrap the program. New applications must be submitted by April 3, 2025, although existing visas can still be renewed[1][4].

This change is expected to be a "huge blow" for retirees from the UK and other non-EU countries who were planning to relocate to Spain. Alternative visa options, such as the non-lucrative visa, are less flexible and require full-time residency of six months a year to maintain the status[1].

100% Tax on Properties Bought by Non-EU Residents

In addition to the end of the Golden Visa program, Prime Minister Sánchez has proposed a tax of up to 100% on properties purchased by non-EU residents. This measure aims to tackle the housing affordability crisis and high rents, particularly in cities like Barcelona and Madrid. The proposal is part of a broader package to address the housing shortage, which includes higher taxes on holiday rentals and tax breaks for landlords who provide affordable housing[2][4].

The tax plan is a response to the growing concern that foreign buyers, who purchased 27,000 properties in Spain in 2023, are driving up housing prices and rents. Sánchez emphasized that these properties are often bought not for residency but for speculation, exacerbating the housing scarcity[2][4].

Impact on Expats and Property Market

The proposed tax and the end of the Golden Visa program are likely to make Spain less attractive for non-EU buyers seeking residency through property investment. This could lead to a drop in high-value property demand and may redirect potential expats to other European destinations like Portugal, Italy, and Greece[1].

For those already living in Spain, the changes do not necessarily mean an end to their residency. Alternative visa options, such as the non-lucrative visa or the digital nomad visa, are available, although they come with different requirements and restrictions[1].

Broader Housing Crisis Measures

The Spanish government's plan to address the housing crisis includes several other measures. These include converting empty flats into affordable rental flats with subsidies and tax breaks, building more public housing, and ensuring existing social housing remains state property. Additionally, there are plans to tax tourist apartments as businesses and offer tax exemptions to owners who make their empty homes available for affordable rent[3][5].

The housing crisis in Spain is acute, with housing prices and rents rising significantly, especially in tourist hotspots. The average price per square meter for new builds has exceeded €3,000 for the first time, and rental prices have been driven up by the proliferation of short-term rentals, contributing to widespread public discontent and protests[2][3].

As Spain navigates these changes, expats and potential buyers must factor in the increased costs and more complex residency processes. While the government's measures aim to provide more housing and better regulation, they also highlight the challenges and uncertainties faced by those considering a move to Spain.