Spain introduces measures to stop overseas buyers
In a remarkable development during the initial six months of 2024, Spain witnessed an extraordinary influx of holidaymakers, with more than 42 million tourists gracing its shores. The month of June proved particularly notable, welcoming an astounding nine million visitors to the Mediterranean nation’s sun-drenched coastlines and cultural landmarks.
Amidst this tourism boom, the Spanish government has unveiled ambitious plans to address the mounting housing crisis. The comprehensive strategy involves the transfer of substantial land holdings to a public housing enterprise, tasked with constructing thousands of much-needed affordable residences. Prime Minister Sanchez elaborated on the scheme, announcing the incorporation of upwards of 30,000 properties currently held by Sareb—a legacy of the devastating 2008 financial crisis—whilst simultaneously implementing measures to repurpose vacant dwellings throughout the country.
The Spanish property market has demonstrated remarkable robustness, with house prices experiencing a significant upward trajectory, recording an annual increase of 8.1 per cent during the third quarter of 2024. Property market analysts and economic specialists have attributed this substantial appreciation primarily to a pronounced disparity between housing demand and available inventory.
A thorough examination of Spain’s most recent housing census, undertaken in 2021, revealed the rather startling statistic that approximately 3.8 million properties stand empty across the nation, constituting roughly 14 per cent of Spain’s total housing stock—a figure that has prompted considerable debate amongst policymakers and housing advocates.
The challenges facing the Spanish housing market mirror similar predicaments observed across numerous European nations, where second homes and holiday lettings have increasingly come under scrutiny for their perceived contribution to housing shortages. The French government, under President Emmanuel Macron’s leadership, implemented decisive measures in 2023, empowering local authorities to impose substantial additional council tax charges—up to 60 per cent—on second homes, aiming to enhance housing availability for permanent residents.
In a related development earlier that same year, French authorities took the unprecedented step of requiring all property owners to declare any secondary residences in their possession, with non-compliance carrying a monetary penalty of €150. This initiative formed part of a broader strategy to better understand and manage the distribution of housing resources throughout the country.
The United Kingdom has witnessed similar policy implementations, with more than 146 local councils introducing doubled council tax rates for second homeowners since April 2023. This measure has resulted in some property owners facing substantial annual bills exceeding £10,000, highlighting the increasing financial implications of maintaining multiple residences in sought-after locations.
The Scottish capital, Edinburgh, has been at the forefront of regulatory innovation, implementing a contentious short-term let licensing scheme in October 2022. This initiative has faced considerable criticism from various stakeholders, who argue that it has led to a dramatic reduction in the availability of holiday accommodation within the historic city.
Looking ahead, England’s Ministry of Housing has signalled its intention to establish a comprehensive registration scheme for property owners in the immediate future. Government officials have repeatedly emphasised their commitment to implementing this system “as soon as possible,” although specific timelines remain subject to administrative and legislative considerations.
These coordinated efforts across multiple European nations reflect a growing recognition of the need to balance tourism infrastructure with residential housing requirements, whilst simultaneously addressing the complex challenges posed by property speculation and vacant dwellings in major urban centres.
Summary
* Tourist arrivals in Spain reached remarkable numbers in early 2024, with 42 million visitors in the first half of the year and 9 million in June alone, demonstrating significant pressure on housing infrastructure.
* The Spanish government has initiated major housing reforms, including transferring land to a public housing company and repurposing 30,000 Sareb properties (remnants from the 2008 financial crisis) into affordable housing.
* Spanish property prices saw substantial growth, with an 8.1% annual increase in Q3 2024, primarily driven by demand significantly exceeding available supply in the market.
* A striking statistic revealed that Spain has approximately 3.8 million empty properties, representing 14% of the nation’s total housing stock according to the 2021 housing census.
* European countries are implementing various measures to address housing crises:
* France authorized local authorities to charge up to 60% additional council tax on second homes
* French homeowners must declare second home ownership or face €150 fines
* Over 146 UK councils have doubled council tax on second homes, resulting in some bills exceeding £10,000
* Edinburgh introduced strict short-term let licensing regulations in October 2022
* England’s Ministry of Housing is planning to implement a new registration scheme for property owners
* These collective measures across Europe reflect a growing trend of governments actively intervening in housing markets to balance tourism demands with residential needs and address property speculation concerns.