Britons will invest their money in places such as Greece and Cyprus instead of Spain, experts warn – amid plans for a 100% property tax for non-EU citizens

Britons will invest their money in places such as Greece and Cyprus instead of Spain amid plans for an ‘extreme’ hike in property taxes, experts have warned.

Measures being proposed in Spain to ease pressures on its housing situation include tax increase of up to 100 per cent on properties bought by non-European Union residents.

Toby Leek, president of property professionals’ body NAEA Propertymark, said: ‘Many Brits may take the news of heightened property taxes in Spain as a blow considering moving to such a location could well have been a lifelong ambition, especially with the convenient location and, of course, the improved weather it provides.’

He said that, while it can be appreciated that Spain is addressing its own housing emergency and looking after Spanish citizens, the proposal is ‘quite an extreme increase’.

Mr Leek added: ‘Many Brits will likely be put off by this extreme hike in property taxes and will be looking to other countries such as Cyprus and Greece with lower property tax levels for their dream home move.’

Spain’s Prime Minister Pedro Sanchez said the overall goal is to provide ‘more housing, better regulation and greater aid’.

Non-EU residents bought 27,000 properties in Spain in 2023, ‘not to live in’ but ‘to make money from’, he said.

Like the UK, Spain has been dealing with pressures on housing costs.

Britons will invest their money in places such as Greece instead of Spain amid plans for an ‘extreme’ hike in property taxes Pictured: Santorini, Greece.

Measures being proposed in Spain to ease pressures on its housing situation include tax increase of up to 100 per cent on properties bought by non-European Union residents. Pictured: Limassol, Cyprus

Rents are seen as a particular issue in major cities such as Barcelona and Madrid, while house prices have also been rising.

Levels of tourism and short-term lets have been seen as compounding problems.

Seila Sanches Lucas, a lawyer at international law firm Broadfield, who helps clients buy and sell property in Spain, said: ‘The proposal by the Spanish Prime Minister will be concerning for those that have already chosen to retire in Spain and for those considering a retirement in the sun.

‘It is just a proposal at this point in time and is not guaranteed to make it onto the Spanish statute books.

‘Even if adopted, the legislative process in Spain is tortuously slow and it is perhaps a little early for UK nationals to worry about this proposal.

‘If adopted, there are many other jurisdictions looking to attract wealthy retirees and investors. For example, Dubai has been called the ‘new Marbella’.’

A three-bed holiday apartment in the Balearics can be snapped up for around £399,879. This would also double 

The 100 per cent tax would put rocket boosters under Spain’s famously affordable property prices, with a five-bed coastal villa in Andalucía that’s currently being advertised for just under £400,000 costing £800,000 

Protesters hold a banner reading ‘Mallorca is not for sale’ at an anti-mass tourism protest on May 25, 2024

Tenerife locals hold placards raising concerns about the impact of mass tourism, October 2024

Your browser does not support iframes.

Isobel Neilson, director at law firm and global immigration specialists Fragomen, said that if the proposals for a 100% tax on home ownership for non-EU nationals were to be introduced, ‘our clients would most likely look to rent instead of buying or alternatively explore other more favourable EU jurisdictions’.

She said people may look towards Portugal or Italy, for example.

Stephen Abletshauser, private client partner at Spencer West LLP, said: ‘This populist move by the Spanish government may well prove to be a long-term own goal.

‘The likes of Turkey, Italy, Malta, Cyprus and even France will welcome this decision in a fiercely competitive market for wealthy non-residents retiring in the sunshine.’