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The innovation will affect property buyers and aims to reduce their buying activity to stabilise the housing market.
The proposed changes
New tax. Citizens of countries outside the European Union without a residence permit will be required to pay a tax equal to the full value of the property they intend to buy. The aim is to reduce the rate of increase in housing prices, especially in major cities such as Madrid.
Spain's Prime Minister Pedro Sanchez said the proposal would be part of an ambitious plan to tackle the housing crisis. Other proposed measures include providing state guarantees for rental housing and distributing thousands of properties through the newly created state housing agency.
Reasons and background
Spain intends to cool the overheated property market and ensure better housing affordability for the local population. Higher taxes for foreign buyers will help reduce housing demand, which should stabilise prices. High taxes may also discourage speculators, who often buy property in popular tourist and business centres, artificially driving up prices and pushing locals out of their neighbourhoods.
Speculative home buying by foreign nationals has long been a sore subject for Spaniards, mainly because such actions often lead to price increases and a shortage of affordable housing. In this respect, the new tax proposal is considered an attempt to protect the interests of the local population and ensure fairer access to housing.
Additional government measures, including government guarantees and new housing allocation mechanisms, aim to simplify the rental process for residents. Authorities underpin these initiatives by establishing specialised agencies to manage and distribute properties, contributing to a fairer and more efficient housing market.
Introducing the new tax is expected to generate much debate and different opinions inside and outside Spain. Still, the Government is convinced of the need for such steps to ensure the country's sustainable development and address housing affordability problems.
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