Catalonia Housing Ban: Foreign Buyers Restricted
Catalan Parliament Considers Restrictions on Foreign Property Purchases
The Catalan Parliament has voted in favor of a motion that could restrict property purchases by foreign residents who have lived in Spain for less than five years. the move is intended to address concerns about speculation adn housing affordability in the region.
The Republican Left (ERC), a separatist party, introduced the motion. It calls on the Catalan goverment to limit property purchases to foreigners with “permanent residency,” defined as those who have officially resided in Spain for at least five years. These residents would need to prove their residency to the region’s housing department before buying property.
The initiative garnered support from the Catalan Socialists-Units parliamentary group, ERC, Comuns, and CUP. However,right-wing parties such as Junts,PP,vox,and Aliança Catalana opposed the measure. This left-right divide mirrors similar debates at the national level regarding a proposed 100 percent property tax for non-EU residents.
The approved document also suggests a possible supplementary tax on real estate transfers to non-EU residents, aligning with a proposal from Spain’s ruling Socialists. Additionally, a “differentiated regime” could be established for EU-based legal entities seeking to acquire property for commercial use. The Catalan Parliament also approved a restriction on foreign investment in real estate progress for commercial purposes.
A proposal to reduce the property Transfer Tax (ITP) on first-home purchases for residents was rejected.
Despite the vote, the motion is currently a declaration of intent.Foreigners can still buy properties in Catalonia, as the measure is not yet legally binding. the vote requires Prime Minister Pedro Sánchez and Catalan leader Salvador Illa to create a ”legal framework” to implement these restrictions on foreign property ownership.
The potential impact of these measures on foreign investment and the housing market remains to be seen. Questions also remain about whether such restrictions would comply with EU legislation on the free movement of capital.
What’s next
The Spanish government and catalan authorities must now collaborate to develop a legal framework to enact the proposed restrictions. The process could involve navigating complex legal and political challenges,including potential conflicts with EU law. The future of foreign property ownership in Catalonia hinges on these developments.