Spanish PM’s 100 Percent Property Tax Claim Not Happening

Euroweekly News ^ | 19 Jan 2025 | Adam Woodward

[nickcarraway]

Spanish Prime Minister Pedro Sánchez shook the world on Monday, January 13, with the ambiguous claim that his government planned to tax properties owned by non-EU nationals by 100 percent.

The soundbite rang alarm bells and made headlines around the world, not least for the ambiguity in its language. Could this be existing properties? Could this be property owned by offshore and non-resident investors? Could this be on the purchase tax on properties? While interpretations of the boastful claim by Sánchez were various, the miscommunication caused hearts to skip throughout the entire expat community in Spain.

But such an extraordinary claim by Sánchez could not be true and almost certainly is not, we can gladly announce.

New information has since come to light that provides clearer guidance on the intended direction of this measure. It appears that the proposal does not refer to a tax equating to 100 percent of the property value but rather to a 100 percent increase in the applicable tax on property acquisition for non-EU, non-resident buyers. This adjustment significantly alters the interpretation and reduces the perceived extremity of the policy.

Documents from government refute 100 per cent property tax claim Certain documents obtained from the governing party now specify the proposal as a tax increase, not a confiscatory measure. For instance, Point 10 of the housing plan refers to ‘a 100 percent’ increase in the applicable tax’ rather than the entire value of the property. Nonetheless, and despite international press headlines being awash with hypothesising, no clarification has been publicly offered by the government.

The political reality in the likelihood of the minority governing party ever being able to pass such an extreme measure of levying a 100 percent tax on foreign-owned property is so improbable given the current political climate when opposition parties have already voiced their hostility to the proposed rule change that even if it were policy, it would never realistically come to fruition.

Procedural process throws doubt on 100 per cent property tax claim Added to this, there would be the procedural hurdles any such measure would face. The legislative process requires thorough draughting, consultation, and parliamentary approval, which, in this case, seems increasingly challenging given the lack of support the party of Pedro Sánchez leads.

Despite the headlines provoked in the world’s press, the enormity of upset caused in the property market, and the mass speculation the Prime Minister’s words fuelled, at no point has anyone from the PSOE-led administration stepped forward to clarify the words of their leader.

Interpretation of the words of the Prime Minister caused speculative interpretation, and naturally so given the ambiguities of his statement. There is now a stronger foundation to believe the proposal pertains to a 100 percent increase in the applicable tax, rather than a confiscatory property tax. However, even with the potential of that tax increase going ahead, political reality suggests it would be highly unlikely to ever happen.

Clarification provided by Abogados Manzanares, Calle Gerald Brenan, Alhaurín el Grande (Málaga).

[blackdog]

Pay the taxes or we’ll burn you out. We’ve got plans, and they don’t include you much.

[Worldtraveler once upon a time]

For all the prose, one sentence is embedded such that many might miss it.

"Point 10 of the housing plan refers to ‘a 100 percent’ increase in the applicable tax’ rather than the entire value of the property."

So a 100 percent increase on a property tax is fine? Prime Minister Thatcher's words ring, as of Europe and other nations, "eventually you run out of other people's money."

Incremental gouging is a government thing.

[ridesthemiles]

SAYING “DOUBLING” the tax would have been less confusing

[Worldtraveler once upon a time]

---- "SAYING “DOUBLING” the tax would have been less confusing"

Indeed. From the UK idiots today to that time when France's Hollande proposed massice tax increases, it turns out the rich can walk away faster and easier than the poor and middle class. There is a sea change coming....

[Worldtraveler once upon a time]

---- "SAYING “DOUBLING” the tax would have been less confusing"

Indeed. From the UK idiots today to that time when France's Hollande proposed massice tax increases, it turns out the rich can walk away faster and easier than the poor and middle class. There is a sea change coming....