New proposals in Spain aim to limit foreign property purchases

Monday 07 April 2025 - 13:20

By: Dakir Madiha

New proposals in Spain aim to limit foreign property purchases

A Spanish political party has proposed new measures to restrict foreign individuals from purchasing property in Spain unless they can demonstrate a minimum of five years of continuous residency.

The Republican Left of Catalonia (ERC) has introduced a non-legislative motion in the Spanish Congress advocating for the implementation of restrictions on foreign buyers in both the northeastern region and throughout the country. This initiative seeks to combat what the party describes as speculative practices that "expel" local residents from the housing market.

According to ERC, foreign buyers account for 15 percent of property transactions in Catalonia, with 60 percent of these purchases occurring without mortgages or any form of financing. ERC member of parliament Etna Estrems emphasized the need to prevent housing from becoming a "luxury reserved for large international buyers" while local residents struggle to secure affordable homes.

The ERC is advocating for regional governments across Spain's 17 autonomous communities to have the authority to impose restrictions on foreign property purchases. They propose a regional authorization system requiring foreigners to obtain a permit from the housing department of the region where they intend to buy a home.

If enacted, this system would mean that non-residents would need to apply for a permit prior to purchasing property, as five years of continuous residence are necessary to qualify for long-term or permanent residency in Spain.

Led by Oriol Junqueras, the party also highlights the importance of differentiating between companies based in the European Union and those with tax residences outside the bloc, aiming to uphold the principles of free capital movement within the internal market.

In January, Spanish Prime Minister Pedro Sánchez garnered attention when he revealed that his government was contemplating a supertax on non-EU property buyers or a complete ban on their ability to purchase homes in Spain without demonstrating ties to the country. However, these proposals have yet to materialize, and critics have raised concerns over the practicality of imposing a 100 percent tax on property purchases and the actual impact of non-resident non-EU buyers on Spain’s housing crisis.

Notary data indicates that in 2023, non-resident third-country buyers represented only 3 percent of total property transactions. Nevertheless, the overall share of foreign buyers—both EU and non-EU residents—accounted for 18 percent of total transactions in 2024, nearly one in five.

Additionally, the Barcelona city council has initiated plans to explore legal mechanisms to prevent investment funds and non-resident foreigners from acquiring property in the Catalan capital.

ERC has cited countries such as Canada, Denmark, and New Zealand as examples of nations that have imposed restrictions on property purchases by non-residents. However, their proposal seeks to extend limitations further, targeting the buying power of residents who have lived in Spain for less than five years, contrasting with previous proposals that focused solely on non-EU non-residents.