As concerns over housing escalate in Spain, Prime Minister Pedro Sánchez has initiated a sweeping plan aimed at tackling affordability issues affecting residents. Recent studies reveal that more than a third of Spaniards express worry about accessing affordable housing—significantly higher than the EU average, which rests at just 13%.
Addressing the Housing Challenge
In a country where housing prices in major cities can soar to over €7,000 per square meter, the issues of accessibility and affordability have reached a critical point. Approximately 35% of the Spanish population reports difficulty in securing affordable housing options. In response, Sánchez is targeting foreign investments in the property market, especially those involving second homes, as part of a broader strategy to alleviate these pressures.
Each year, between 60,000 and 90,000 foreigners invest in Spanish real estate, often purchasing properties intended for vacation or rental use. This influx, while beneficial to the economy, exacerbates the already strained local housing market, particularly for residents seeking affordable options. Sánchez’s proposed reforms include imposing hefty taxes on non-resident foreigners purchasing residential properties. This tax could equate up to 100% of the property’s value, effectively redefining Spain’s reputation as a prime destination for affordable holiday homes.
New Tax Measures for Tourist Rentals
The reform package further extends to properties rented out as tourist accommodations. Sánchez and his cabinet are advocating for a taxation framework that classifies tourist apartments as business ventures and taxes them accordingly—bringing them in line with other economic activities. Conversely, property owners who convert empty homes into affordable rentals may benefit from tax exemptions of up to 100%. Sánchez’s left-wing government has consistently highlighted the adverse impact of tourist rentals, particularly in cities like Madrid, Barcelona, Malaga, and Valencia, where they believe such properties limit the availability of affordable housing for locals.
Can Spain Replicate the Vienna Model?
The Sánchez administration draws inspiration from the Vienna model of social housing, where one in four properties is designated as social housing. However, implementing a similar system in Spain poses various challenges. A 2022 study indicated that social housing constitutes a mere 2.5% of Spain’s overall housing stock—ranking it low compared to its European peers, including Portugal and Romania. During his address in Madrid, Sánchez criticized previous governments for their lack of effective public housing policies, attributing “disastrous consequences” to neoliberal ideologies promoted by the opposition, specifically the right-wing Partido Popular.
Mixed Reactions to the Proposed Reforms
Despite enthusiasm from Sánchez’s coalition partners, including the Sumar party, discontent looms among opposition groups. Partido Popular spokesperson Borja Sémper has articulated strong opposition to the proposed measures, labeling them as “interventionist” and “utopian.” He cautioned that such initiatives would potentially inflate prices and reduce overall housing supply. Santiago Abascal, leader of the far-right Vox party, echoed similar sentiments, asserting that Sánchez’s proposals are merely electoral tactics aimed at garnering support from his base.
Conclusion
Spain stands at a critical juncture in its housing policy landscape, with significant reforms aimed at addressing the pressing issue of housing affordability. As the government maneuvers through complex economic terrain, the implications of these new tax policies will unfold, shaping the future of housing in the country.
