New Tax Rules for Non-EU Buyers in Spain: Everything you need to know

The Spanish government has recently announced a proposal to increase taxes on non-EU residents who purchase property in Spain. This has raised concerns among investors and potential buyers.  Below, we answer the most frequently asked questions (FAQs) with our Corporate Immigration Manager, Andrea Ochoa, regarding this proposal and its impact. 1. What is the Spanish…

The Spanish government has recently announced a proposal to increase taxes on non-EU residents who purchase property in Spain. This has raised concerns among investors and potential buyers. 

Below, we answer the most frequently asked questions (FAQs) with our Corporate Immigration Manager, Andrea Ochoa, regarding this proposal and its impact.

1. What is the Spanish government proposing?

The Spanish Prime Minister has suggested increasing taxes for non-EU residents purchasing real estate in Spain. However, this is still a proposal and has not been implemented as law.

2. Is this tax increase already in effect?

No. This is not a law, and it is not currently enforceable. Even if the proposal is presented to Parliament, it is unlikely to be approved in its current form.

3. Could this proposal violate European laws?

Yes. The European Union (EU) upholds the free movement of capital, which applies not only to EU member states but also to third countries. A tax specifically targeting non-EU buyers could be deemed discriminatory and may be challenged by the European Commission.

4. Has Spain faced similar legal challenges before?

Yes. Spain previously had to amend its inheritance tax law because it was found to violate EU principles. If the proposed tax increase on non-EU buyers is implemented, it could face similar legal scrutiny.

5. Will this tax increase apply uniformly across Spain?

Not necessarily. The Spanish government is considering modifying property tax regulations at the regional level. This means that each autonomous region could have the power to set different tax rates, leading to variations across the country.

6. How likely is it that this proposal will become law?

The chances of this proposal becoming law are quite low. Apart from potential legal challenges, the proposal would need significant political support, which is not guaranteed.

7. How is the market reacting to this proposal?

The announcement has created uncertainty among investors and potential buyers. However, since the proposal is not yet law and has significant legal hurdles, most experts believe that the impact on the real estate market will be minimal in the short term.

8. What should non-EU buyers do now?

For now, non-EU buyers should stay informed and monitor any legal developments. Consulting with real estate and legal experts can help navigate potential changes and ensure compliance with any future regulations.

9. Where can I get more information or legal advice?

If you are considering investing in Spanish real estate and want to understand the potential impact of this proposal, our team at Orience is here to help. 

While this proposal has generated discussions, its chances of becoming a law remain low. Investors should stay informed but not be deterred from exploring opportunities in Spain’s real estate market.