Living Abroad Life in Spain

Spain’s 100% property tax for UK buyers: Everything you need to know

Alex Beaney

30.01.25

Read time 3 minutes

Brits dreaming of owning a holiday home in sunny Spain have been dealt some disappointing news recently, as a brand new tax for non-EU buyers has been proposed.

The Spanish government has announced that it wants to introduce a new 100% property tax in Spain for non-EU buyers.

The aim is to address the country’s housing crisis, where too many properties are being snapped up by foreign buyers for the purposes of holiday rentals - while Spanish residents are struggling to find a home.

But what will this mean for UK buyers now and in the future? Read on to find out more about the proposals, who they’ll affect and what you need to do if you have a Spanish property purchase in mind.

What is the new Spanish property tax?

If approved by the Spanish parliament, the new property tax would increase the tax rate on the purchase of Spanish homes by non-EU residents by “up to 100%”.¹

When announcing the proposal, Spanish Prime Minister Pedro Sánchez described it as a way to limit the number of Spanish homes purchased by “non-resident non-EU foreigners”.¹

He pointed out that residents of non-EU countries bought a total of 27,000 properties in Spain in 2023 - saying that these properties were purchased in order to make money (such as rent or resale) rather than for the buyers to live in.¹

However, no details have been shared on how the tax will actually be applied or when the proposal will be put to parliament for approval. It will need to gather enough votes to become legislation.

The Spanish government did say that it will only be finalised “after careful study”.¹

Who will be affected?

If it becomes law, this new Spanish property tax will affect anyone looking to buy a property in Spain who is not a permanent resident in an EU country. Unfortunately, this means British buyers - as the UK is no longer part of the European Union.

It may mean a significant increase in the amount of property transfer tax British buyers have to pay when purchasing holiday homes and rental properties in the country. It’s better news for UK expats permanently moving to Spain, as they may be exempt from the 100% tax as permanent residents.

❓ Did you know: According to the latest figures, in 2023, there were 12,470 Spanish property sales involving a British buyer.²

Under Spanish law, a person is classed as a resident for tax purposes if they live in the country for more than 183 days a year.¹

At present, UK buyers (as well as EU and Spanish citizens, and foreigners who are permanent residents in Spain) have to pay transfer tax of around 10% on Spanish property purchases - although the rate varies by region.¹

Planning on buying a Spanish property? Here’s what you need to do next

If you had your heart set on an apartment in Madrid or a holiday home on the Costa del Sol, this proposal will likely be alarming news. However, it’s important to remember that no timescale has been announced for the proposal to be put to parliament. And even if approved, it may take time for the legislation to come into effect.

This gives British buyers some time to act. You may want to move quickly on your overseas property purchase before any new Spanish property tax is introduced. But you should also bear in mind the possibility of retrospective taxes or taxes on existing owners being brought in at a later date.¹

🇪🇸 Check out our complete step-by-step guide on the process, costs, and considerations if you're thinking about buying property in Spain.

If you do decide to act now and snap up your dream Spanish property, you’ll need a fast, secure and low-cost way to make large transfers between the UK and Spain.

Wise is the ideal solution, and it’s quick and easy to open an account online.

With a Wise account, you can send money worldwide for low fees* and mid-market exchange rates. There’s even a dedicated secure service for large transfers, perfect for overseas property purchases.

And you can hold money in 40+ currencies all in one place, including EUR and GBP. This gives you a convenient way to manage your money between the UK and Spain, whether you’re visiting to view properties, holidaying there, paying bills or putting down a deposit on a house.

Sources used:

BBC News - Spain plans 100% tax for homes bought by non-EU residents
Spanish Property Insight - Full year figures show UK still head and shoulders above other markets when it comes to buying property in Spain

Sources last checked on date: 29-Jan-2025

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