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Spain Introduces 100% Transfer Tax on Non-EU Property Buyers!

Spain Introduces 100% Transfer Tax on Non-EU Property Buyers!

Created12.09.2025, 15.36

Updated12.09.2025, 17.51

Spain proposes 100% tax on property purchases for non-EU buyers, and this controversial proposal could change the real estate market for these buyers! But what is the meaning of this?

The ne State Complementary Tax in Spain w Spanish property tax, known as the State Complementary Tax, aims to impose a 100% transfer tax on property acquisitions by those who are not residents of the European Union (EU) or European Economic Area (EEA).

Spanish Prime Minister Pedro Sánchez emphasizes that most of the real estate purchases made by non-EU citizens in the county are for speculative purposes, while expressing his support for this measure as a way to prevent social inequality.

Although this bold move is one of the 12 initiatives recently introduced to address the county’s housing crisis, it could significantly impact non-EU investors. Moreover, it could raise fresh debates similar to those around property taxes in Spain for non-residents.

What Are the Main Features of the Proposed Tax?0

The new property tax in Spain is planned to apply to the transfer or acquisition of:

Resale homes (new builds and off-plan properties are exempt).
Property-related rights, such as a life interest or partial ownership.
Properties valued based on either the cadastral reference value or the market price (whichever is higher).

Importantly, this property tax for foreigners in Spain would be charged in addition to the existing Transfer Tax (ITP), meaning non-EU buyers could end up paying double the usual tax amount. In addition, this tax is planned to be managed by the central government, thereby eliminating the regional differences seen in Spain's traditional transfer taxes.

Further, it should be noted that this proposal does not affect EU or EEA nationals, creating a clear distinction based on nationality or residency status.

What Are the Potential Legal Issues with Spain’s Proposed New Tax?

The proposed property tax in Spain for foreigners raises numerous legal questions within the country and at the European level. For instance, according to Article 14 of the Spanish Constitution, equality must prevail in the country and discrimination based on nationality cannot be permitted. However, many experts believe that the new tax infringes on that principle because it targets buyers solely based on their non-EU status.

Moreover, Article 139.2 of the Constitution protects the free movement and establishment of people and goods, which the real estate transfer tax Spain proposes arguably restricts for foreign investors.

On the European Union front, Article 63 of the Treaty on the Functioning of the EU prohibits restrictions on the free movement of capital, and the Court of Justice of the European Union has previously ruled against discriminatory tax practices on non-residents. In other words, it can be said that the new tax could face legal challenges at the EU level.

How Will This 100% Transfer Tax Impact Non-EU Buyers?

Normally, a property priced at €200,000 would incur the standard Transfer Tax (ITP), which typically ranges from 6–10% depending on the region, resulting in a tax of roughly €12,000–€20,000.

But if you are wondering how much is non-resident property tax in Spain under the new proposal, the transfer tax could double to €200,000, adding a significant additional cost on top of other purchase expenses. So, the financial impact of this tax would be profound for non-EU property buyers, potentially influencing purchasing decisions and investment strategies.

Therefore, it can be concluded that such a tax could:

Deter international buyers from investing in Spain’s real estate market,
Prompt investors to reconsider their purchasing strategies,
Drive interest towards off-plan property transactions that are exempt from this tax.

Furthermore, this tax could influence timing and eligibility considerations, for individuals looking at Spain as a retirement destination, such as retirees relocating from outside the EU.

What Could Be the Economic Consequences of This Tax for Spain’s Housing Market?

The country relies heavily on foreign capital, particularly in coastal and tourist regions such as the Costa del Sol and Costa Blanca. It means that non-EU buyers make up a significant portion of this demand, playing a key role in supporting property prices, rental markets, and the local economies in these areas.

While this is the case, introducing new Spanish tax laws for foreign residents, such as the 100% transfer tax, could have several negative consequences. It may sharply reduce foreign buyer activity, leading to fewer transactions overall and cooling the property market, particularly in regions reliant on international investors.

Also, a slowdown in property sales could reduce income for real estate agents, developers, and businesses tied to tourism. Furthermore, lower foreign investment could lead to diminished residential tourism and decreased rental occupancy rates in affected areas. Briefly, although the tax rate is high, the potential reduced sales volumes could cause government tax revenues to decline indirectly.

What Steps Can You Take As a Potential Buyer?

Since the tax proposal is still under discussion and requires approval by both the Parliament and the Senate, as a buyer, you still have some time to plan your next steps carefully. However, the legislative process is expected to unfold over the coming months.

The proposal was submitted by Spain’s Socialist Party (PSOE) to the Spanish Parliament in May 2025, followed by parliamentary debates from June to July. The Senate is expected to review it from September to October, with the final decision between November and December 2025. So, if approved, the non resident property tax Spain proposes could take effect as early as January 2026.

So, if you are not an EU citizen, completing property purchases before the tax comes into effect can be a strategic step to mitigate potential additional costs. Additionally, investing in new-build or off-plan properties can offer an attractive alternative, allowing you to benefit from the 100% transfer tax exemption.

Given the complexity of these changes, it is highly advisable to consult with legal advisors or professional real estate companies that have deep experience with the Spanish tax system. For further information on how this proposed tax could affect your property purchase, and to explore the best approaches in today’s market, TEKCE is here to support you every step of the way.

By collaborating with us, you can navigate these regulations with clarity, ensuring your investment is managed efficiently!