Facing growing concerns in Spain over the lack of affordable property for young people, Spanish Prime Minister Pedro Sánchez has unveiled his socialist-led government’s proposed measures to improve access to housing and reverse the rise in house prices in the country.
The plan announced on Monday includes 12 proposed measures, which include limiting the purchase of homes by non-resident non-EU nationals by raising the property transfer tax to as much as 100% of the property’s value.
The proposal, which will need to be voted through parliament, would apply to non-EU citizens who don’t have legal residence in Spain.
Sánchez said it was ‘an unprecedented measure in our country’s history, already applied in other democracies like Denmark and Canada, and highly appropriate given the housing emergency situation’, adding that in 2023, non-residents bought 27,000 properties in Spain, primarily for speculation.
Other proposals include a legal amendment to establish a 100% tax exemption on IRPF (Personal Income Tax) for owners who rent according to the Reference Price Index, the application of VAT to tourist flats in so-called ‘tense housing areas’, and the creation of a system of public guarantees to protect owners and tenants who participate in the affordable rental system.
With regards raising taxes on holiday rentals, Sánchez said the measure was so that the property owners pay ‘like a business’, while residents of the country’s main cities grappled with soaring rents.
‘It isn’t fair that those who have three, four or five apartments as short-term rentals pay less tax than hotels or workers,’ the prime minister said.
The measure would be based on a new European Union directive on value-added tax for digital platforms, he said. Spanish hotels now pay a reduced 10% VAT rate, which is included in the bill.
Sánchez has repeatedly stated that the current government term must be the legislature of the right to housing.
He announced the new measures on Monday at the forum ‘Housing, the Fifth Pillar of the Welfare State’, alongside the senior leadership of his government, representatives from the construction sector and social stakeholders, and where he presented the main points of a plan inspired by models from countries like Denmark and Canada.
During the electoral campaign for regional elections, Sánchez had announced measures to build thousands of social homes and promote affordable rentals. However, the rise in the sale price of previously owned homes remained unchanged in 2024 (7.1%), and the government is now seeking ways to reverse the situation.
Emphasising that Western Europe faces the challenge of avoiding a division into a two-class society of ‘rich owners and poor tenants’, he pointed out that the average price of housing in Europe has increased by 48% in the past decade, a rise that is ‘unbearable’ as it outpaces household income growth by double.
‘Access to housing has become the greatest issue for the middle and working classes and a barrier to the independence of young people,’ he said, adding that it is a key driver of inequality and wealth disparity among citizens.
Sánchez has divided the objectives of the plan into three main areas: ‘More housing, better regulation, and more significant aid.’
Another measure is the transfer of more than 3,300 homes and two million square metres of residential land to the recently created public housing company. These two million square metres, according to Sánchez, will be used to build ‘thousands and thousands of social homes for affordable rental, primarily for young people’.
He also announced that, during the first half of 2025, the public housing company will begin to incorporate over 30,000 homes from (Spain’s ‘bad bank’) Sareb, 13,000 of which will be immediately available.
Sánchez stated that the measures would also include the creation of a public guarantee system to protect both property owners and tenants participating in affordable rental schemes.
The central government will ‘provide the necessary funding and guarantees so that citizens can rent, and owners can do so with security and without taking on risks’, he said.
This system, ‘successfully tested in Spain’, will begin this year with owners renting to individuals under 35 years old, he added.
Más viviendas, mejor regulación y mayores ayudas para el acceso a la vivienda.
Esa es la política del Gobierno de coalición progresista. Con las medidas ya aprobadas y con las 12 medidas nuevas que aplicaremos ahora.
Nos vamos a dejar la piel en la causa de la vivienda.
Por… pic.twitter.com/frt87gAdL4
— Pedro Sánchez (@sanchezcastejon) January 13, 2025
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