If you have been following the Spanish press—or perhaps just your WhatsApp groups—this week, you may have seen headlines that sound more like satire than serious politics: “Spain Proposes 100% Tax on Foreigners Buying Homes!” As a tax law firm based in Mallorca, we know exactly how alarming such news can be, especially for our international clients with property interests in Spain. Let’s break down what’s actually happening, what it means (and what it doesn’t), and why—contrary to those dramatic headlines—there is no reason for panic.
What Is Being Proposed?
The Spanish Socialist Party (PSOE), currently leading the national government, has introduced a draft law proposing a series of measures to address the acute housing crisis in Spain. Among the most headline-grabbing proposals is a new tax: any non-EU (that is, non-European Union) individual or entity who purchases property in Spain would face a one-off tax equivalent to 100% of the property’s value. In effect, this would mean that a foreign, non-EU buyer would pay double the price of a home—once to the seller, and once to the tax authorities.
This sounds dramatic, and it is. But before anyone puts their Mallorca dreams on hold, a bit of context and a healthy dose of legal reality are needed.
Is This Likely to Become Law?
Let’s be clear: this is a political proposal, not an enacted law. Spain’s government, while currently led by PSOE, does not enjoy a parliamentary majority. Passing any law, let alone one as radical as this, will require the support of multiple other parties—many of whom have already voiced skepticism or outright opposition. Spain’s political landscape is famously complex, and ambitious proposals are often watered down or blocked entirely in the legislative process. In short: for this proposal to become reality, it has a very steep hill to climb.
Is This Even Legal?
From a legal perspective, this tax would immediately raise eyebrows—if not red flags—at several levels:
- Spanish Constitution: Spain’s own Constitution explicitly forbids taxes that are confiscatory in nature. A tax of 100% is, by definition, confiscatory. It is hard to see how this could survive judicial review.
- European Law: While the measure targets non-EU buyers, there are still serious questions about whether it would breach wider European principles on free movement of capital and non-discrimination, which the EU seeks to uphold even in dealings with non-member countries.
- Regional Autonomy: Real estate taxes in Spain are traditionally the preserve of the autonomous communities, not the central government. Many regions—particularly those whose economies rely on international buyers—would likely push back hard.
In other words: while bold headlines make for great clickbait, the legal reality is far more complex and, frankly, the chances of this measure becoming enforceable law are slim to none.
Why Is This Happening?
The government’s stated goal is to curb speculative investment and ease pressure on housing supply for local residents. In certain parts of Spain—Mallorca included—there is understandable concern about affordability and the social impact of foreign investment. However, international buyers have also contributed enormously to local economies, job creation, and the overall vibrancy of many Spanish regions.
A Message to Our Clients: Take a Breath
If you are currently considering investing in Spanish property, or if you already own a home here, the best advice is simple: stay calm. These kinds of proposals appear from time to time in the Spanish political debate, especially in an election year or when housing makes the front pages. Most never make it past committee stage; fewer still survive the legal, constitutional, and political hurdles required to become law.
At Lullius Partners, we are watching the situation closely and will keep all our clients and partners fully updated. Should any real legislative risk arise, we will be ready with practical advice and robust legal strategies.
In the meantime, rest assured: your Spanish property plans—and your dreams of Mediterranean sunsets—are safe for now.
If you have further questions or wish to discuss your personal circumstances, please contact our Private Wealth & Tax team. As always, we are here to provide clarity and confidence in a fast-changing world.
