Spain’s proposed tax on foreign property buyers, initially announced in early 2025, continues to generate debate and uncertainty more than a year later. While the plan to potentially double the cost of Spanish properties for some non-resident purchasers garnered international attention, its current status remains unclear, caught in parliamentary delays and facing potential legal challenges.
The original proposal, unveiled by Prime Minister Pedro Sánchez in January 2025, aimed to address Spain’s housing crisis by curbing investment purchases from outside the European Union. According to Sánchez, approximately 27,000 properties were purchased by non-EU residents in 2023, often not for residential use but as investment vehicles. The proposed “Complementary State Tax on the Transfer of Real Estate to Non-EU Residents” stipulated a tax rate of up to 100% on the property’s value.
This meant, for example, that a property valued at €200,000 could effectively cost a non-EU buyer €400,000, a significant increase compared to the standard Spanish property tax (ITP), which typically hovers around 8% of the property’s value. The measure was intended to prioritize housing availability for residents and potentially lower rental costs.
However, the implementation of the tax has been stalled. Despite the draft law being presented to Congress in May 2025, little concrete progress has been made. The Spanish government has faced numerous political and logistical challenges since the initial announcement, including extreme weather events, a fatal train crash, and the complexities of regularizing the status of over half a million undocumented migrants. These distractions have undoubtedly contributed to the slowdown in legislative action.
Despite the lack of immediate implementation, calls for restrictions on foreign property ownership persist. The Spanish government has requested authorization from the European Commission to limit purchases in the Canary Islands by non-residents intending to use the properties for non-residential purposes. The Canary Islands are particularly affected by the housing crisis, with over a third of homes sold to foreigners and property prices having risen by more than 50% in the last decade.
Similar sentiments are echoed on the mainland. In January 2026, Toni Valero, regional coordinator of Izquierda Unida in Andalucía, announced his party’s intention to request measures mirroring those proposed for the Canary Islands be applied to Málaga, restricting purchases for non-residential use. “We will ask the government to do with Málaga what it has done with the Canary Islands, which is to request that the European Union prohibit speculation in the province, prohibit purchases for speculative purposes, and restrict purchases to those homes that are going to be used for living,” Valero stated.
Even Spain’s hard-right party, Vox, submitted a proposal in late 2025 to increase taxes on foreign property buyers, intending to use the revenue to fund housing benefits for Spanish citizens and promote the construction of subsidized housing.
However, the 100% tax proposal has also encountered legal scrutiny. Experts suggest the measure, in its current form, may conflict with European Union legislation, specifically Article 63 of the Treaty on the Functioning of the European Union (TFEU), which protects the free movement of capital between member states and with third countries.
Crucially, the proposed tax is targeted specifically at non-EU, non-resident foreigners – those who spend less than 183 days a year in Spain. Analysts suggest that a complete ban on foreign purchases would be legally complex, making tax adjustments a more feasible approach. As Mallorca-based lawyer Alejandro Del Campo of DMS Consulting explained, the 100% tax “would flagrantly violate EU law.”
As of , the 100% tax remains a proposal, not an enacted law. According to Spanish property portal Fotocasa, “It is important to emphasise that this 100 percent tax has not been approved and is not currently applied in Spain.” The portal emphasizes that the proposal is part of an ongoing debate regarding limiting investment-driven property purchases, but has not yet translated into a legal obligation.
The situation remains fluid, with parliamentary debate scheduled for July 2025, though its outcome is uncertain. While the initial shockwaves of the announcement have subsided, the potential for increased taxes on foreign property buyers continues to loom over the Spanish real estate market, creating uncertainty for both investors and prospective homeowners.
