Spain to costa lot more

Spain has announced plans to impose tax of up to 100% on real estate bought by non-residents from countries outside of the EU, here are some thoughts about how this may affect UK expats or those thinking about moving there

Matthew Sperry, Private Wealth partner at Katten Muchin Rosenman UK LLP, says:

“These developments out of Spain are not surprising given the perception that the golden visa program has massively contributed to its housing crisis.  That said, I am not sure how much of that perception is grounded in fact.  I suspect that the long time disconnect between housing supply and demand, combined with institutional investors raiding the Spanish housing market, are much bigger drivers of the problem.

But this is a big development as the entry price for Spanish golden visa program was relatively low (minimum 500k Euro investment in real estate) in exchange for the right to live, work, and study in Spain, and freedom EU travel.  Compare that to Italy’s lump sum regime, which requires payment of an annual tax of 200k Euros in exchange for similar benefits.  For individuals looking for a EU residential option at a relatively reasonable entry point, Portugal seems to be the only option left.”

Stephen Abletshauser, Private Client partner at Spencer West LLP, says:

“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.”

 
Following the announcement of Spain’s proposed 100% property tax for non-EU citizens, comment from Mauro De Santis Bo, Financial Adviser at GSB Wealth.

“With years of experience helping Britons relocate to Spain, we know how popular it is for its lifestyle and climate. However, Spain’s proposed 100% tax on property purchases by non-EU buyers could shift interest toward alternatives like Portugal, Cyprus, or Greece.

“Also, in response to the Prime Minister’s claim that people are buying for ‘mainly for speculation’, this has not been my experience, instead it’s about creating a home or enjoying retirement. We’ll be monitoring these changes closely to help clients make informed decisions and consider alternative destinations if needed.”