Britons to Shift Investments to Greece and Cyprus as Spain Plans 100% Property Tax for Non-EU Citizens
Spain’s proposed measures to address its housing crisis, including a potential 100% property tax on non-EU buyers, are sparking significant concern among prospective British investors. Experts argue that such a move could deter Britons, many of whom have long dreamed of retiring or owning holiday homes in Spain due to its proximity and favorable climate. While the Spanish government, led by Prime Minister Pedro Sanchez, seeks to alleviate housing pressures and increase affordability for its citizens, critics describe the tax proposal as an “extreme” measure that could discourage foreign investment in the country’s real estate market.
In 2023, non-EU residents purchased 27,000 properties in Spain, many for investment purposes rather than personal use. However, rising house prices, high rents in major cities like Barcelona and Madrid, and the proliferation of short-term rentals have exacerbated Spain’s housing challenges. Legal experts caution that the proposal is still in its early stages and may face a prolonged legislative process. Meanwhile, countries such as Greece, Cyprus, and Italy are likely to capitalize on this opportunity by positioning themselves as more attractive destinations for British retirees and property investors seeking lower taxes and a welcoming environment.
The potential policy shift could lead many non-EU nationals to consider renting instead of buying in Spain or redirecting their investments to alternative European markets with favorable tax regimes. Experts note that regions such as Portugal, Malta, and even France could benefit from Spain’s restrictive stance. Furthermore, countries outside Europe, such as Dubai, are also emerging as popular alternatives, providing lucrative opportunities for retirees and investors looking for sunny destinations with fewer regulatory hurdles. Spain’s proposed tax changes, though aimed at addressing local housing needs, may ultimately push wealthy foreign buyers to explore other jurisdictions, creating a more competitive market elsewhere.