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Spain launches another tax raid on British holidaymakers
Spain launches another tax raid on British holidaymakers

Telegraph

time05-06-2025

  • Business
  • Telegraph

Spain launches another tax raid on British holidaymakers

Are you a holiday let owner affected by the Spanish government's new tax? Get in touch money@ Spain's socialist government is planning a tax raid on British holiday let-owners in the country. The ruling Spanish Socialist Workers' Party wants to charge 21pc VAT on stays of less than 30 days – more than double the rate paid by hotels. It comes as Madrid lawmakers take aim at foreign property investors as part of efforts to tackle high housing costs. Draft legislation put before the Spanish parliament would raise taxes on owners of short-term tourist rentals from the current rate of zero. The levy rate paid by hotels is just 10pc. Unveiling the new bill last month, housing minister Isabel Rodriguez said: 'Homes are for living in [...] the measures seek to guarantee the right to rental housing for families.' The proposed change is part of the same legal push to impose a 100pc purchase tax on the sale of Spanish property to non-European Union buyers and also includes higher taxes for second homes and vacant properties. Alex Radford, partner at Spain-based law firm English Solicitor & Abogado, said: 'The VAT has got more chance of being implemented than the 100pc tax on a property bought by a non-European.' He said that if approved, the bill would likely increase the cost of holidays and lead to fewer available holiday lets in Spain. 'We would envisage that the rental [market] is going to be slightly more expensive. If owners have to add 21pc VAT to the cost of a rental, then we would expect rentals to decrease and people will look at other countries.' 'It's still early days and we don't know what will get approved and what will not,' Mr Radford added. 'Britons are the number one enemy' Millions of Britons who visit and live in Spain face losing out because of the new laws, which will undergo scrutiny and potentially amendment before being voted on in the second half of this year. There were more than 260,000 British expats living in Spain at the last official count in 2020, while it received 1.6 million tourists from the UK – more than any other country – during the busy April period last year, according to the Spanish statistics agency. Robert Amsterdam, partner Amsterdam & Associates, a law firm that has campaigned against higher Spanish taxes, said: 'The Spanish government is diverting the attention of the Spanish people away from the government's behaviour and they're coming up with the British as enemy number one.' Most estimates place the number of British people who own property in Spain between 800,000 and one million. A figure for the number of British holiday let-owners in the country was not available. British non-residents bought 3,480 homes in Spain in the first half of 2024, making up 38pc of a total of 9,166 properties sold to non-resident non-EU buyers, according to the latest available figures from the General Council of Spanish Notaries and Spanish Property Insight. Growing anti-tourist sentiment in Spain has already seen cities like Malaga and Madrid capping new licences for holiday lets, while Barcelona will ban them completely by 2028. Spanish media reported in January that Barcelona's plans would cost €1.9bn (£1.6bn) and lose the city around 40,000 jobs, based on a report by consultancy PWC. The country's minority coalition government has defended a crackdown on foreign property investors and holiday let-owners as necessary to make more housing available for Spanish people. There is a deficit of 450,000 homes across Spain, according to a Bank of Spain report published this week. In popular tourist destinations like the Canary and Balearic Islands half the housing stock is either holiday lets for tourists or homes owned by foreigners, it said. Javier Peñate, a legal adviser to a holiday homeowners association in the Canary Islands, told Reuters: 'The sole objective is to put an end to these activities and leave [tourism] in the hands of hoteliers.' Short-term rentals in the province already pay 7pc VAT, as do hotels.

Spain proposes 100% tax on non-EU house buyers
Spain proposes 100% tax on non-EU house buyers

South China Morning Post

time23-05-2025

  • Business
  • South China Morning Post

Spain proposes 100% tax on non-EU house buyers

Spain's government is pushing ahead with a controversial proposal to hit non-European Union residents with a 100 per cent tax when buying homes, as it seeks to tackle a brewing housing crisis. Prime Minister Pedro Sanchez's Socialist party presented the plan as part of a broader housing bill submitted to Parliament on Thursday. The bill seeks to promote 'measures that enable access to housing, since we are facing one of the largest problems our society is currently confronted with', according to a copy of the draft legislation seen by Bloomberg. Sanchez first announced plans to create the new tax in January, in an attempt to address growing discontent over surging real estate prices and housing shortages in areas including Madrid and Barcelona. At the time, Sanchez said foreigners were snapping up homes and speculating on price increases, and that non-EU residents bought 27,000 properties in 2023. UK citizens are the biggest foreign buyers of Spanish property, mainly in coastal regions such as Valencia, Andalusia and the Balearic Islands. Germans, Dutch and other EU citizens will be exempt. The UK left the EU in early 2020, severing political ties it had held for almost half a century. It then stayed inside the EU single market and customs union for almost a year to facilitate trade.

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