The opposition to Spanish Prime Minister Pedro Sánchez said the tax on property purchases by non-residents of the European Union was “xenophobic,” according to Euractiv.
Opponents stated that they would not apply the levy in the regions they administrated. Luis de la Matta, director of communications of the People’s Party (PP), declared:
We are not going to facilitate a xenophobic measure.
A housing crisis amid a chronic shortage of affordable accommodation and rising rents undermines Sánchez’s cabinet. His socialist government said on Monday it would restrict the purchase of homes by non-EU residents. It would also increase the tax by 100% of the property’s value, citing the same practice in Canada and Denmark.
Meanwhile, the PP controls most of the regions popular with British and Latin American homebuyers, such as Valencia, Andalusia, as well as the Canary and Balearic Islands.
The government plans to levy taxes through the Property Transfer Tax (ITP), affecting up to 26,000 second-hand properties in major cities and coastal areas. However, Spanish property platform Fotocasa said the measure could discourage foreign investment, as only 2% of Spanish homes were bought by non-EU residents.
Currently, home buyers in Spain pay an ITP tax of between 6% and 13%, depending on the region. The Catalonia Tenants’ Union stated that the majority of foreign buyers came from the EU. Therefore, the tax would be “grandiloquent but irrelevant,” the union added.
