On 13 January 2025, Pedro Sánchez stood at a lectern and announced — alongside an 11-measure housing reform package — a tax of "up to 100%" on the property purchases made by non-resident, non-EU buyers in Spain. The headline travelled the world. Fifteen months later, the bill has never been formally debated in Congress, no version of it has been voted on, and the government's own January 2026 housing package quietly dropped it from the agenda. The headlines persist. The policy does not.
For UK, US, Russian, Canadian, Swiss and other non-EU buyers — the audiences who reasonably panicked when the announcement broke — the practical 2026 reality is far closer to status quo than to a revolution. This article covers what was actually proposed, where the bill stands now, who would have been affected, the exemption most coverage misses, and three workarounds that smart buyers are already using regardless.
What Sánchez Actually Announced — 13 January 2025
The proposal was the headline measure of a 12-point housing package designed to address Spain's housing affordability crisis. The structure: a new State Complementary Tax on Real Estate Transfers, layered on top of the existing regional Transfer Tax (ITP), specifically targeting purchases by non-EU non-resident buyers.
The mechanics, as drafted: 100% of the taxable base, where the taxable base is the higher of the property's cadastral reference value or its market value. Effectively, this would double the tax cost of a resale property purchase for an affected buyer — a Madrid apartment that today carries a 6% ITP would become a 6% + 100% obligation.
The political framing was direct: foreign cash buyers, particularly from the UK and the United States, were portrayed as bidding up prices in coastal and capital markets, locking out local residents. The 100% tax was presented as a deterrent — not a revenue measure, but a barrier.
"In 2023, non-EU residents bought around 27,000 homes in Spain — many of them not to live in, but to speculate," Sánchez said in his presentation, citing the figure as justification.
What Sánchez Actually Did Next — January 2026
The clearest signal that the 100% tax has lost political momentum did not come from the opposition. It came from Sánchez himself.
In January 2026, twelve months after the original announcement, the government presented a new housing reform package. The centerpieces: rental-market incentives, longer-term lease guarantees for landlords, and tighter regulation of seasonal (tourist) rentals. The 100% non-EU buyer tax was not the centrepiece. It was not in the headline measures. It was, effectively, set aside.
This is the part of the story international real estate coverage has largely missed. The bill did not just stall in Congress — the government itself moved the spotlight elsewhere. The political appetite for a confiscatory transfer tax did not survive 12 months of parliamentary arithmetic.
Where the Bill Stands in Congress — Zero Votes, 15 Months In
Despite the global headlines, the bill has not been formally debated by Congress as of late March 2026 (per parliamentary records). It has had no readings, no committee scrutiny, no plenary discussion. It is, technically, still on the legislative table — but in practice it sits in a queue that the government no longer prioritises.
The reasons are arithmetic. Sánchez's PSOE-led minority government depends on a fragile coalition of regional and left parties. On this particular bill, two key blocs refuse to back it for opposite reasons:
- Junts — the Catalan separatists — oppose the measure on the grounds that the housing problem is one of supply, not foreign demand, and that taxing foreign buyers does not produce a single new home.
- Podemos — the far-left party — argue that the tax is insufficient. They want a ban on all non-residential property purchases, not a tax that wealthy buyers can simply absorb.
Without either bloc, the government cannot reach a majority. Without a majority, the bill does not advance. And, separately, legal advisors have warned that any version of the measure adopted as drafted may face challenge at the EU level for restricting the free movement of capital — a foundational principle of the single market.
Who Would Have Been Affected — and Who Would Not
Even if the bill ever passes in something close to the original form, the scope is narrower than the headlines suggest.
| Buyer type | Subject to proposed tax? |
|---|---|
| UK / US / Canadian non-resident buyer | Yes |
| Swiss / Norwegian non-resident buyer | Yes (Switzerland and Norway are not EEA for this purpose) |
| Russian / Chinese / Australian non-resident buyer | Yes |
| EU citizen buyer (German, Dutch, French, Polish, Italian, etc.) | No — exempt |
| EEA citizen buyer (Iceland, Liechtenstein) | No — exempt |
| Spanish resident (any nationality, including UK/US who hold residency) | No — exempt |
| Inheritance and gifts | No (not a purchase) |
The political target was clear from the framing: British and American buyers in coastal and capital markets, who together represent the largest non-EU buyer cohorts. UK citizens have been the largest single foreign buyer group in Spain every year since Brexit, and US buyer numbers have set successive records over the past three years.
The Critical Exemption Most Articles Miss — Off-Plan and New-Build
Off-plan and new-build properties — purchased directly from a developer — would be exempt from the proposed tax, even if it passes. They are taxed under VAT (IVA), not under the Transfer Tax (ITP). The proposed 100% surcharge applies only to ITP. No ITP, no surcharge.
This is the single most important factual point in the story, and it is consistently underplayed by international media. The proposed measure is a complementary surcharge to ITP. ITP is the regional tax on resale (second-hand) property transfers. New-build property bought directly from a developer is taxed under IVA at 10% plus AJD (Stamp Duty) at typically 1.5%. No transfer tax means no surcharge.
For a non-EU buyer in 2026 worried about the proposal, the practical implication is straightforward: shifting from a resale to an off-plan or new-build purchase removes the proposed tax entirely. This is not a loophole — it is structural. The drafters either intentionally exempted developer-built property to avoid choking off new construction, or did not think the exemption through. Either way, it stands.
Costa Blanca, Costa Cálida and Costa del Sol — the markets where most international buyers actually transact — happen to be among the most active new-build markets in the country. The exemption is not theoretical.
For a deeper breakdown of the difference between IVA and ITP, see our step-by-step guide to buying property in Spain and our dedicated guide to property taxes in Spain for non-residents.
Why Foreign Buyers Are Actually Pulling Back — And It Isn't the Phantom Tax
Spain's official statistics for 2025 show a notable retreat in non-resident foreign buyers — purchases fell almost 10% year-on-year to 51,411 transactions, the lowest level in four years. It is tempting to attribute this to the 100% tax announcement. The data does not support that as the primary driver.
The retreat is concentrated in three real factors:
1. The end of the Golden Visa programme — April 2025
Spain's Golden Visa, which granted residency to non-EU nationals purchasing property valued at €500,000 or more, was abolished on 3 April 2025. Industry analysis attributes a measurable 4.4% decline in non-resident foreign buying directly to this change. Buyers who would have used the visa as a residency-and-investment vehicle simply stopped — or shifted to other jurisdictions like Portugal or Greece.
2. Macroeconomic and currency factors
2025 saw continued ECB interest rate adjustments, sterling weakness against the euro relative to 2022 peaks, and post-COVID buyer normalisation. After three exceptional years of foreign demand, a year of cooling was statistically inevitable.
3. Anti-foreign sentiment and political signalling
2025 saw multiple high-profile public demonstrations across Spain framed around foreign property ownership and tourist saturation. The combination of these protests, the 100% tax announcement (even unenacted), and tighter holiday-rental rules created an atmosphere of uncertainty. High-net-worth buyers value legal certainty above all — and Spain in 2025 offered less of it.
The retreat is also concentrated geographically. Madrid recorded the steepest fall in foreign demand at -20.3%, followed by the Canary and Balearic Islands at around -10%. The Costa Blanca and Costa Cálida coastal markets — where most of our buyers transact — saw less dramatic falls and remain comfortably above the 10-year average. Foreign buyer activity in Spain in 2025 was still around 20% above the 10-year average and significantly above pre-pandemic levels.
For a fuller market view, see our Spain property market forecast for 2026.
Three Realistic Workarounds — Even If the Tax Eventually Passes
Smart buyers — and good advisors — already plan around the proposal as though it might one day pass. There are three approaches that are routinely used.
1. Establish Spanish residency before the purchase
The proposed tax targets non-resident non-EU buyers. Becoming a Spanish resident before completing the purchase removes the trigger entirely. The most relevant residency routes for property buyers are:
- The Digital Nomad Visa (DNV) for remote workers and freelancers — currently the most popular entry route, with relatively quick processing.
- The Non-Lucrative Visa (NLV) for retirees and passive-income holders.
- Work-permit residency for those with a Spanish employment contract.
- For US citizens specifically, see our Americans buying property in Spain guide for the practical NIE-and-residency sequence.
Establishing residency takes several months and triggers Spanish tax residency rules — but for buyers planning to spend significant time in Spain anyway, this is often the right move regardless of the 100% tax question.
2. Buy off-plan or new-build directly from a developer
As covered above, IVA (VAT) governs new-build purchases, not ITP. The proposed 100% surcharge does not apply. For buyers willing to wait 18-36 months for completion (or for those buying near-final projects), this is the simplest single hedge against the proposal. Off-plan property typically also offers structured payment plans and developer warranties not available on resale.
3. Joint ownership with an EU/EEA spouse or family member
The proposed tax is buyer-specific. Where a non-EU buyer is married to or partnered with an EU citizen, structuring the purchase under joint ownership in proportions that reflect the EU partner's share can materially reduce exposure. This is not a structure to use without legal advice — Spanish notarial and tax registration is precise — but it is widely used.
If financing is part of the picture, our guide to Spanish mortgages for foreigners in 2026 covers current rates (Euribor 12M is around 2.7% as of April 2026), LTV limits for non-residents (typically 60-70%) and the four banks actively writing non-resident mortgages.
What We Are Seeing at Bravos Estate
Across our buyer pipeline over the past six months, three patterns have become visible:
UK buyers ask, then proceed. The 100% tax announcement triggered an initial wave of cancellations and "let's wait and see" emails in February-March 2025. By summer 2025, that wave had reversed — most of those buyers came back, often having read enough to understand the bill was stalled and that off-plan was exempt. UK clients now typically ask about the tax in their first call, accept the explanation, and proceed. The deal flow from the UK has been steady through Q1 2026.
US buyers gravitate to off-plan. American buyers, more risk-averse to perceived legal uncertainty, have shifted noticeably toward new-build projects in Costa Blanca and Costa del Sol. Where 2024 US buyers were roughly evenly split resale/new-build, 2026 to date has been closer to 30/70 in favour of new-build. The 100% tax discussion is a contributing factor — though strong developer warranties and customisation options also play a role.
Dutch and German buyers — the structural winners. As EU citizens, neither group is affected by the proposed tax. Dutch buyers in particular have been the fastest-growing group of foreign property buyers in Spain in 2025. We see this in our own search analytics: Dutch-language coastal queries ("appartement kopen Torrevieja", "villa kopen Altea") have grown materially over the past quarter. Read our companion article on Dutch buyers becoming Spain's fastest-growing property market.
What to Watch in 2026 and 2027
Three things would meaningfully change the picture:
- A snap election in Spain. The current parliamentary arithmetic blocks the bill. A different government — particularly a clearer left or right majority — could revisit the proposal in some form, in either direction.
- EU-level pushback. If the bill ever reaches a vote and passes, expect immediate constitutional challenge at the EU Court of Justice on free-movement-of-capital grounds. Outcome would take 12-24 months.
- Other countries copying the framing. Portugal, Greece and parts of Italy are watching closely. If Spain ever delivers a working version, expect imitators within 18 months.
None of these are imminent. For a 2026 buyer, the practical answer to "should I worry about the 100% tax?" is: read the exemptions, plan accordingly, and proceed.
Frequently Asked Questions
Has the 100% tax on non-EU property buyers passed in Spain?
No. As of April 2026, the bill has not been voted on. It has not been formally debated by Congress. The government's own January 2026 housing package centred on rental reform and did not feature the 100% tax as a headline measure.
Does this affect EU citizens buying property in Spain?
No. The proposal targets only non-EU and non-EEA non-residents. German, Dutch, French, Polish, Italian and other EU citizens are explicitly exempt.
Does this affect British citizens?
If passed in current form, yes. UK citizens have been non-EU for property tax purposes since Brexit. As of April 2026, however, no bill has been adopted, so the practical position is unchanged.
Does it affect new-build purchases?
No. Off-plan and new-build property purchased directly from a developer is taxed under IVA (VAT), not the Transfer Tax (ITP) the proposed surcharge applies to. New-build is structurally exempt.
What if I am a non-EU citizen but I become a Spanish resident?
Spanish residents — of any nationality — are exempt. The proposed tax is specifically for non-resident non-EU buyers. Routes to residency include the Digital Nomad Visa, the Non-Lucrative Visa, work-permit residency, and family-reunification visas.
Is the Golden Visa still an option?
No. Spain abolished the Golden Visa programme on 3 April 2025. Existing Golden Visa holders retain their residency. New applications are not accepted. See our guide to Golden Visa alternatives for current options.
If the tax is one day passed, would it be retroactive?
No legislator has proposed retroactivity, and Spanish tax law generally does not allow retroactive transfer taxes on completed purchases. A purchase completed before any future law took effect would not be affected.
