28.02.2025
EU citizens will not pay higher property purchase tax in Spain
In recent months, Spain has been considering the introduction of new tax regulations that would apply exclusively to property buyers from outside the European Union. These proposals may involve additional charges, potentially reaching even several percentage points of the total transaction value. It is important to emphasise, however, that citizens of the European Union are not affected by these measures. Polish buyers, as EU citizens, remain subject to the standard tax rules applicable to property purchases in Spain, without any increased or additional tax burden resulting from the proposed changes. As a result, EU nationals can continue to purchase real estate in Spain under the same conditions as before, with full legal certainty and without the risk of higher acquisition taxes being introduced specifically for them.
Spanish 100% Tax: Will Foreign Investors Be Affected?
On 13 January 2025, Spanish Prime Minister Pedro Sánchez presented a series of proposed reforms to the real estate market aimed at making housing more accessible for residents of Spain. His plan includes a range of measures designed to encourage property owners to make their homes available to the local community.The most controversial element of this proposal, however, is the planned doubling of property purchase taxes for buyers from outside Europe.This controversial proposal has caused concern across the real estate sector. In addition, many owners and employees of Polish real estate agencies began informing their clients about an alleged 100% increase in property purchase tax, misinterpreting the Prime Minister’s statements and, as a result, seriously misleading buyers.
At Gecko Real Estate Group, we are committed to providing accurate and reliable information. For this reason, below you will find a set of explanations clarifying the true intent behind Prime Minister Pedro Sánchez’s statement, including:
◉ Who could potentially be subject to a higher (double) property purchase tax in Spain
◉ Whether this proposed change has any realistic chance of being implemented
◉ What level of taxation buyers planning to purchase property in Spain could expect if such measures were introduced into law
The proposal applies exclusively to non-EU buyers!!
WHAT DO THE PROPOSED NEW REGULATIONS ON PROPERTY PURCHASE TAX IN SPAIN MEAN?The new regulations are directed solely at foreign investors from outside the European Union. Their primary objective is to limit speculation in the real estate market and protect local buyers. This means that:
◉ The additional tax would apply only to non-EU citizens.
◉ Citizens of EU member statescan continue to purchase property in Spain under favourable conditions.
KEY FACTS FOR INVESTORS FROM THE EUROPEAN UNION!
For many buyers interested in investing in Spain—whether for a holiday home or a long-term investment—it is crucial to understand that:
◉ Purchasing property in Spain remains a safe and predictable process. The market offers a wide range of attractive segments, from apartments to Marbella properties and luxury villas in Marbella.
◉ Any additional tax burdens that could increase transaction costs will not affect buyers from the European Union.
What could buyers from outside the European Union expect?
Spain operates a decentralised tax system in which individual regions set their own property tax rates. In some areas, lower taxes are applied to encourage investment in rural or less developed regions.Examples:
◉ Galicia – reduced property transfer tax rates in selected rural zones.
◉ Extremadura – tax incentives for new businesses and for buyers purchasing property in rural areas.
Currently, the property transfer tax (Impuesto de Transmisiones Patrimoniales – ITP) varies by region, for example:
◉ Andalusia – 7%
◉ Region of Murcia – 8%
◉ Valencian Community, Catalonia and Community of Madrid – 10%
◉ Canary Islands – 6.5%
If the proposed changes are approved, buyers from outside the European Union could face a significant increase in acquisition costs, as their applicable tax rates would be doubled. For example, a British buyer purchasing property in Andalusia could pay 14% instead of the current 7%.
Does the proposal to increase tax rates for property buyers in Spain have a real chance of success?
The statement made by the Spanish Prime Minister regarding a potential increase in property purchase taxes in Spain should be viewed as a general political signal, outlining a possible direction rather than a concrete legislative proposal formally submitted to parliament. In his remarks, he did not specify whether such a tax would apply nationwide or be limited only to high-demand cities such as Madrid, Barcelona, or Malaga.Legal experts point out that any such tax could face significant legal challenges, both at the national and EU level. Spain already has a history of being required to withdraw discriminatory tax regulations. In the past, for example, the country was forced to abolish higher inheritance tax rates applied to non-EU citizens.
The new proposed tax regulations, which may raise concerns among foreign investors, do not pose any risk to buyers from the European Union. As an EU citizen, you are guaranteed that your investment in Spain will remain free from any additional tax burdens.
If you are planning to buy property in Spain, now is an excellent moment to invest in real estate in Marbella.
The proposal voiced by Pedro Sánchez, which was later repeatedly misinterpreted by unprofessional real estate agents, created unnecessary uncertainty among buyers interested in property in Marbella. This is precisely why working with reputable real estate agents in Marbella is so important, ensuring clarity, security, and the highest level of satisfaction from the services provided by established local agencies.
You can read more about the benefits of working with trusted real estate agents here >>.
If you are planning to purchase property in Spain, and especially in Marbella, contact Gecko Real Estate Group to discover the best real estate opportunities in Marbella. We will be happy to answer all your questions related to buying property on the Costa del Sol.