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Spain proposes 100% tax on homes bought by non-EU residents

162 points by vinni2 2y ago

bborud 2y ago
Would it work or would it just make things worse?
- krupan 2y ago
  It will make things worse
- ilya_m 2y ago
  Easy! It won't work and it would make things worse.
  - bborud 2y ago
    I was hoping for someone to share a bit of insight on why they think so. (I too suspect it will not achieve the desired outcome, but I had hoped someone could shed some light on the particular conditions in Spain rather some default answer)
affinepplan 2y ago
so is there any actual evidence that foreign home ownership is causing meaningful housing price inflation in Spain? or is this just uninformed pandering like it is in the US
- nsklab 2y ago
  For the last years we’ve had 500K immigrants coming every year. That’s what’s causing inflation.
  - hjgjhyuhy 2y ago
    Printing massive amounts of money is what caused the inflation.
    - nsklab 2y ago
      I was talking about housing inflation specifically. Housing has increased in price more than the rest of goods plus it’s been increasing in price for a long time, long before covid. Adding millions of people and not building anything makes housing prices skyrocket. One of the two needs to be dealt with and, since immigration also makes salaries plummet for the most vulnerable, why not kill two birds with one stone.
- scotty79 2y ago
  Do you need specific evidence that additional demand causes price increase when the supply is pretty much fixed?
  - draw_down 2y ago
    [dead]
- stavros 2y ago
  What's causing it in the US?
  - rvnx 2y ago
    In Canada potentially Chinese immigrants in Vancouver/Toronto, in the US it's an over-generous monetary policy (through low interest rates, especially during COVID)
    - affinepplan 2y ago
      in Canada, like in the US, it's a lack of supply mostly because of draconian zoning and land-use policies. Chinese immigrants are NOT the primary cause of housing cost inflation, and are likely not even in the top 10 causes.
      - OJFord 2y ago
        I don't know or claim that it's any truer, but I thought the oft-reported reason, for Vancouver/BC especially, was Chinese investment, and explicitly not immigration even, the chief complaint that the growth has been/is expected to be such that they're left unoccupied?
        _whiteCaps_ 2y ago
        This is my experience. The two houses that I share a backyard fence with are empty. A caretaker comes by once a month to have a look around one of the houses but otherwise they're unoccupied.
        qball 2y ago
        >for Vancouver/BC especially The ALR bans any and all significant development in BC. Land is not scarce in BC; land that it's legal to build on is.
        OJFord 2y ago
        Ok - I'm not Canadian, idk what ALR is - I'm just saying what's disagreed with up-thread isn't what, in my experience, is the common claim (whether it's correct or not).
- Retric 2y ago
  Meaningful is a weasel word here. Even 0.1% price increase which would be impossible to measure directly still adds up across the entire housing sector. But, equally important is simply the number of natives prevented from buying the home they want because someone is getting a vacation property.
  - renewiltord 2y ago
    Yeah, you have 0.1% of a house, sure. But do that across a thousand houses and you have 100% of the houses. It's that simple.
    - Retric 2y ago
      500$ on a 500k house might not seem like a big deal, but I’d still rather have the 500$.
  - egwor 2y ago
    I think I read 20,000,000 need housing and this will impact 20,000 per year so broadly the numbers are inline.
    - throwaway2037 2y ago
      How can 20M be even remotely correct? Spain has a total population of about 48M.
  - kasey_junk 2y ago
    But you also need to measure the dampening impact on home building. If builders would have built N units knowing they could easily sell some % them to foreign buyers but now they can’t, then you might lose the whole supply. And all the knock on effects for contractors, suppliers, etc
    - Retric 2y ago
      Cities are rarely constrained by the willingness of someone to build housing, it’s generally more an issue of being allowed to build housing.
- yeknoda 2y ago
  Depending on the market, market prices can be decided by a very small number of transactions that set things. Probably true for houses in Spain (limited supply) and foreign wealthy buyers (very high potential demand)
- rolothrow 2y ago
  Totally anecdotal, but I live in the largest city in Spain, and even in my residential area (as opposed to the touristy spots) every week I can see ads for "we buy your house, paid upfront over market value, Chinese investors". Posters in walls, flyers in windshields and so on.
  - CommanderData 2y ago
    This is excellent, assets like property don't grow on trees and needs to be protected from foreign investors. Absolutely need something like this in the UK.
    - matt-p 2y ago
      I think the ship has sailed, but regardless isn't it all meaningless? Surely they can setup a company to get around it, or will be ban all foreign ownership of shares too?
      - zdragnar 2y ago
        Land is a public good, insofar as "buying" the land still comes with obligations to the state (paying taxes, conforming to building codes and zoning regulation, etc). Just because you "own" it doesn't actually mean you can do as you please. Given all of that, it is not unreasonable to limit or outright prohibit foreign ownership of land, or ownership of land by companies which are not majority-locally controlled.
        matt-p 2y ago
        It's interesting, I just think the second order effects might be a bit scary. Having said that I guess for FDI there's always the option of getting a local company to "JV" with like in China.
      - CommanderData 2y ago
        Assets cant be shipped overseas. They are here, in the UK. That's the beauty of it. Taxes can force them back to UK ownership. The rich are buying the only asset the middle class will ever probably own, housing.
- matt-p 2y ago
  Of course, it's just more demand, like immigration, aging population and so on. Of course those are a much more difficult target..
- iforgot22 2y ago
  Even if it does, I don't see why it really matters. Cost of living has nothing to do with the value of the land you live on. Maybe the real problem is foreign investors leave the property vacant?
- jopicornell 2y ago
  In my hometown, Palma, in Mallorca, I live in a street where 50% of houses are owned by foreign people or investors/airbnb. The neighborhood is not 50% but not that low. The problem? Prices skyrocketed, like a 10x in 10 years (for big houses, small houses 4x). I hear more english/german/sweedish than spanish (or catalan) in my dog walks. Besides economic implications (a lot for local people trying to find places to live), there are cultural/social implications. The neighborhood used to be a community, where people were open to help and share. Now this is changing and evolving into an individualist neighborhood. Our oficial language is being minoritized even more. This doesn't seem like the neighborhood we used to live on. Not everything is economy. The intangible heritage is something we should take care more.
kjsingh 2y ago
what about corporate ownership?
- WalterBright 2y ago
  In order to justify a corporate purchase, there needs to be a return on investment. A vacant property is not that.
  - jfghi 2y ago
    I disagree. The large corporations in total own hundreds of thousands of homes in their portfolios. The value of renting or selling can be boosted significantly by introducing scarcity on the margins between supply and demand. A vacancy of a small percentage of the portfolio can ensure the rest of the portfolio is worth much more. To elaborate a little further, it’s not necessarily the act of having it sit empty but rather keeping the pricing high regardless of whether the property stays empty. That becoming industry standard becomes a recipe for prices spiraling out of control, at least for a bit of time.
    - WalterBright 2y ago
      Pricing high just means opportunities for others to undercut it and snatch away the business. Check out those owners of vacant office buildings lately. Oops.
- inetknght 2y ago
  > what about corporate ownership? Homes, and real estate in general, should not be an investment vehicle. Screw those corporations.
nozzlegear 2y ago
Just tax land value.
- jedberg 2y ago
  How do you calculate the unimproved land value? This is an interesting question with the fires in LA right now. Is the land still as valuable as it was before the house burned down, minus the rebuild cost of the house? Or is the value intrinsically tied to the community that was there but no longer is? Or is the value actually higher now that a developer can come in and remake an entire neighborhood?
  - fastball 2y ago
    I definitely recommend reading Lars Doucet's treatment[1] of this subject. You can skip to section 5 if you want the most direct answer to your question, but the whole thing is worth reading. The short answer is that there are many ways you can assess unimproved land value. The "Multiple Regression Analysis" method I think is the most relevant here: you'll see from the linked article a table that includes all sorts of factors related to both aspects you mention: factors of neighborhood/community (some positive, some negative) and factors of potential (some positive, some negative). e.g. there is even a factor of "Proximity to natural disaster areas", which would definitely decrease the land value after this LA-area disaster. In this particular case, I would expect that Land Values would go down after the fires, as there are many more factors related to positive neighborhood features (which no longer exist if the neighborhood has burned down) than there are factors related to "development potential". Though of course it also matters how you weight these things. Anyway read the article, my summary does not do the subject justice! [1] https://www.gameofrent.com/content/can-land-be-accurately-assessed https://www.gameofrent.com/content/can-land-be-accurately-as...
  - behnamoh 2y ago
    Interesting game theory situation: - if land value depends on the community that was there, then owners would all have incentive to rebuild their burnt down houses to regain the values. - but owners probably realize most owners will sell their property as soon as things are back to normal. that would reduce the value of surrounding houses. - so owners will rebuild as fast as possible, probably cutting lots of corners, just so they won't left behind to sell. - some people start selling their houses but the late comers realize it's not worth it for them to sell it because the value has dropped a lot. so they stay. - the new owners move in to the area and house prices go back up.
golergka 2y ago
I want to make sure I understand this correctly. If you bought a house a few years ago, Spain will effectively rob you of it now? Or will it only apply to new purchases, so you'll have to pay x2 market value if you want to buy one? If it's the former, than even flaunting such a plan is a complete catastrophe for any foreign investment in Spain from now on. But if it's the latter, it'll just bring to life a whole industry of middle-men, which will use their EU residency to buy property in their name to be used by other people. Both ways, it's yet another attempt to force a market to do something that will lead to either disastrous, or just bad results.
- egwor 2y ago
  believe it is new purchases
- gruez 2y ago
  >If it's the former, than even flaunting such a plan is a complete catastrophe for any foreign investment in Spain from now on. There's investments that don't involve real estate. Moreover, property isn't a productive asset, so discouraging investment into that is arguably a good thing. Investing money into a factory means you get more stuff produced. Investing money into property just... sits there.
  - WalterBright 2y ago
    > property isn't a productive asset It is when you rent it out.
    - yoyohello13 2y ago
      Literal rent seeking behavior from foreign investors.
    - iforgot22 2y ago
      In theory, the market should push owners to rent when prices stabilize. Eventually. In the meantime, it's possible that some foreign investors don't care too much about the opportunity cost. I think some kind of vacancy tax is the only good way to fix this if it's a real problem.
somewhereoutth 2y ago
Another (better?) target should be homes used for short term let - i.e AirBnB etc. Homes have such extreme valuations because of the underlying cash flow (or 'rent' in its most abstract sense). Without tourists willing to pay many multiples of what they'd pay at home for accommodation, that cash flow wouldn't be there.
- icegreentea2 2y ago
  The article says they are also targeting tourist rentals.
rbjorklin 2y ago
This will undoubtedly make some brexiteers very unhappy.
- ipnon 2y ago
  It's quite funny because Great Britain is the reason why the Spanish won their war of independence.
- cmsj 2y ago
  Good. I love this for them. Source: totally not still bitter Remainer.
  - spacedcowboy 2y ago
    Seconded. Bastards.
  - Gvaskas 2y ago
    [flagged]
- floxy 2y ago
  Is that because: A.) There is significant overlap between Brexiteers and those with enough extra wealth to afford vacation / second homes in Spain. Is there any way to quantify this? I would have thought that those with a nationalistic bent wouldn't be keen to own homes in foreign lands. Plus I had the impression that the Remainers were more towards the urban, wealthy, citizen-of-the-world types who would at first blush seem more likely to buy houses elsewhere. B.) The Brexiteers were hoping that the Remainers would all move away, so they don't have to deal with them anymore? C.) The Brexiteers want to colonize Spain? D.) Brexiteers wish they would have thought of the idea punitive taxes on foreigners first? E.) Other?
  - johannes1234321 2y ago
    There is a notable amount of "expats" who permanently moved to Spain under freedom of movement, then voted for Brexit and then were angry that Spain/EU started to treat them as foreigners. How many hundred that are I don't know, but they made "fun" news stories during those times.
mhandley 2y ago
Anything to stop a non-EU resident owning an EU company that owns a Spanish home?
- matt-p 2y ago
  Of course not! Such an insane plan.
- rapatel0 2y ago
  One of the more effective (but potentially over reaching) parts of EU law is that the governments usually give enforcement powers with discretion on how to enforce them. On the one hand it’s annoying because there are no clear rules for how to do business at times. On the other hand, it does typically do a better job of articulating the “spirit of the law” and not allowing people to hack around the letter of the law. I’m pretty sure if using a hack became a trend, then they would start suing people in a few years down the road and extract all the money.
- V__ 2y ago
  It's not trivial to set up a business as a non-eu citizien. As far as I know every EU business has to have an eu citizen representative. Additionally, a company owned property can't just be used privately.
  - gruez 2y ago
    >As far as I know every EU business has to have an eu citizen representative You can't hire a nominee director? >Additionally, a company owned property can't just be used privately. They can't "rent" it back to the owner?
    - ajb 2y ago
      That sort of thing is a bit risky. One company I followed was bought out by a US vehicle owned by a Chinese investor, and then everything ground to a halt because (it appears[1]) the local agent fraudulently changed the bank accounts into their own name and locked out the owner. Operating stuff in a foreign legal jurisdiction is hard. [1] this seems to have been the judgement of the court, but not all the fillings are free to access.
WeylandYutani 2y ago
Average house price in Netherlands is 500k. If you offload your house to the next sucker you can still outbid most people when you move to Spain as a pensionado.
nayuki 2y ago
That's essentially an export tariff.
- Terr_ 2y ago
  Perhaps if they were mobile homes. :p The comparison breaks down a little further with cases where the foreign owners just rent the home out.
  - gruez 2y ago
    >Perhaps if they were mobile homes. :p Tourism counts as an "export" even though everything stays within the country's borders. >The comparison breaks down a little further with cases where the foreign owners just rent the home out. So... an investment tax?
    - Terr_ 2y ago
      Hmmmm, kinda? AFAIK usually an investment tax is on gains, so "you must pay X% when purchasing an the capital" tax seems pretty unusual, or perhaps it exists under some other term. It's not quite a usual sumptuary tax either... I'm assuming it's more about ownership than usage, since it doesn't hit local landlords, and there are already visa/immigration systems if it were a matter of people-movement.
switch007 2y ago
Ah yes the playbook to distract from immigration, and lack of house building, ie the policies designed to increase house prices
go13 2y ago
[dead]
throaway2501 2y ago
Canada should follow suit
- switchbak 2y ago
  BC has already implemented actions to limit foreign ownership without them actively living in the residence. Probably more to be done though, but one needs to be careful about unintended consequences.
  - throaway2501 2y ago
    like house prices falling to affordable levels?
    - bluGill 2y ago
      That is the intended and predicted concequence. unintended is things you didn't think of and they can take a long time to appear.
      - throaway2501 2y ago
        as a canadian, i’m willing to take the chance (s)
  - duxup 2y ago
    >without them actively living in the residence This seems like it would be a bit of a difficult thing to police as far as foreigners goes.
    - throaway2501 2y ago
      an “unintended” consequence
- swat535 2y ago
  They did but they left so many loopholes that was it was basically pointless. Foreigners simply started making an incorporation or using any of the quick "PR" schemes to be able to purchase a property. Many people will even pool money from the multiple families if need be to purchase residence and then renting it to Canadian citizens for profit or putting on AirBnb.
desireco42 2y ago
This is equivalent from seizing the properties... I can't imagine this or something similar working well for Spain at all. It will just kill inflow of capital and they will alienate anyone willing to work with them. Advantage of Spain is that it has good climate, prices are not high and it is lawful country. As soon as you trip this last one, it is the same like some 3rd world country.
louison11 2y ago
Blaming foreigners for housing prices is misdirected. The real culprit is slow bureaucracy & zoning laws making it impossibly slow to get a permit to build anything in both Spain and Portugal. Both of these countries for example have so many abandoned houses needing to be renovated, and so many foreigners coming in with money to do it - but they can never do it because you can't get a permit in literally forever... I don't know about Spain, but another problem in PT is the building companies too, are unreliable, and typically don't deliver houses in less than 3-5 years if you decide to build new. Increase the supply, and the prices will go down.
- WorkerBee28474 2y ago
  No, that argument assumes you can only blame 1 thing at a time. Even if the bureaucracy is the worst offender, every foreigner buying a house still results in 1 less house for Spaniards. Sure, fix bureaucracy, but don't pretend foreign purchases have zero effect.
  - AuthorizedCust 2y ago
    If you’re in oversupply, as the parent comment suggested, then is the effect of additional buyers meaningful?
    - WorkerBee28474 2y ago
      If you have extra supply of houses needing renovation, as in the comment, and renovations require labor and/or materials to complete, having foreigners pay to renovate houses to be livable will decrease the ability of Spaniards to renovate houses to be livable. For example, let's assume renovations are 100% completed by local crews. Any crew working for a foreigner is working for them because A) the foreigner is paying more than a local for the work B) the foreigner is paying enough to make a profit and the local isn't (which is a subset of A). There is no situation in which adding foreign money results in more houses for locals. If you eliminate the ability for foreigners to renovate, the renovation crews will take the money that the locals can pay. There will be fewer renovation crews, because some crew will not be profitable at the lower rate, but more crews working to renovate houses for Spaniards. Similarly, for materials, given supply and demand curves (and assuming that the marginal units added won't cause economies of scale) eliminating the ability for foreigners to buy materials for renovations will move the curve intersection down to a lower price and volume.
rednafi 2y ago
The issue is that countries expect foreigners to bring in money, earn a lot, and pay taxes at the 90th percentile, but they’re (the locals) reluctant to share resources in return. A 100% taxation model turns it into a one-way street. Sure, if you don’t need foreign investment, you can afford to do that. But let’s be real—welcoming foreigners isn’t an act of charity. Governments usually do it because foreigners are often more productive, pay higher taxes, or fill jobs that locals don’t want. Turning it into a one-sided deal has consequences. Immigration policies are funny; every western country treats them like a magical cure-all, only to later blame immigration for any and every problem.
- ralsnop 2y ago
  If India had 25% white EU members similar to Sweden having 25% migration background members (mostly from Africa or the Middle East), perhaps Indians would get a tiny bit protectionist. The accusation that locals are reluctant to share resources is offensive at this point. There is no space and people can barely afford to pay rents. Meanwhile there are "golden visas" to Portugal or Cyprus where rich Chinese can gain entry to the EU and buy up everything. For a token "investment" like buying stocks to the tune of EUR 1,000,000. They do not exactly build a semiconductor fab. Again the myth that "foreigners are more productive". Where does that come from? West Germany did just fine before 1990, everything deteriorated since then.
  - JambalayaJimbo 2y ago
    What does whiteness have to do with anything?? Indians are protectionist, with regards to immigration from poorer countries like Bangladesh.
    - rednafi 2y ago
      Umm what? India has a lower per capita income and worse quality of life than Bangladesh. https://countryeconomy.com/countries/compare/bangladesh/india?sc=XE34 https://countryeconomy.com/countries/compare/bangladesh/indi...
  - 2y ago
whatever1 2y ago
Enforce taxes for non occupancy instead. Like €1000 per day that a property is not occupied. Currently the excepted cash flow of buying some property and locking it empty is positive. We need to make it VERY negative.
saguntum 2y ago
The English language reporting on this reform proposal is not comprehensive. Here's an article on it by one of the national papers of record, El País: https://elpais.com/espana/2025-01-13/sanchez-anuncia-una-intervencion-del-mercado-desbocado-sobran-airbnb-y-faltan-viviendas.html https://elpais.com/espana/2025-01-13/sanchez-anuncia-una-int... Some interesting tidbits from the article: - Some local governments, which are run by a party opposed to the governing national party, oppose the existing laws regarding price regulation and refuse to enforce price caps. This is possible because Spain has a lot of power devolved to local governments. The proposal attempts to side-step local governments by giving property owners a 100% income tax rebate if they abide by national price regulations for their properties. It essentially incentivizes individuals to enforce what regional governments are supposed to be implementing. - Spain's public housing inventory is low compared to other European counterparts - Spain's at 2.5%, France at 14%, Netherlands at 34%. - There are some comparisons to the construction rates during the 2000s housing bubble and how the inventory has shifted between single and multi family dwellings. - The measures include plans to promote prefabricated/modular housing as it is much cheaper to produce at scale. Sidestepping uncooperative local governments is an interesting technique given their devolved system of government. I would also be curious to see how prefab/modular housing measures develop. If they are combining some old school "price cap / limit foreign investment" strategy with a pro manufactured housing YIMBYism, that would be kind of unique. From my quick scan of the article, the 100% tax on non-EU residents isn't even reported on. The reform is much more comprehensive and, in my mind, likely to get passed in some form even if the 100% tax gets cut from the final bill. There are also some less than factual opinion statements like this dropped in the Guardian's article: > Given his government’s longstanding struggles to pass legislation, one analyst suggested to the Financial Times that the government’s aim was to deter foreign property investors by creating “uncertainty and noise” with a proposal that has slim chances of becoming law. IMO this is under-selling the current president's political survivability, regardless of what you think of him or his policies. He is currently in power because he convinced a separatist Catalonian party whose leader is exiled from the country to join his coalition. I'd rather not get into it on HN, but read about his tenure for yourself. The Guardian's article is not a good enough summary of what is being proposed and is not giving thorough enough context.
- 2y ago
icar 2y ago
Houses should not be an investment, but only used for what they are: a place to live. That's directly opposed to why someone not local would buy them. This fall short, it should be straight up forbidden, also for EU residents (who are a big issue as well, looking at you German and French people that buy houses, leave them empty all year but 1 month and/or don't even learn the language and traditions of that place)
- omnimus 2y ago
  I think EU is ok as many people actually live somewhere else thanks to EU laws. What should get hard taxed is owning multiple homes. There are people with 100s flats not even under a company but an individual. And companies that do own homes as business should be stevards of properties with max profit margins - it can be good business but not unhinged money printer it is in becoming everywhere.
  - SergeAx 2y ago
    So, companies should not be allowed to build new multi-flat houses? Or should they be forced to sell them the moment the building is complete?
chainmail2029 2y ago
[dead]
philjw 2y ago
Good - even as EU citizen from a "wealthier" country who also considered buying an apartment in Spain I felt put off by the sheer amount of non-EU citizens taking the easy and cheap route out, coming over to sunny, walkable and high quality of life Spain with good public health system and showing their excitement about the "low prices" - which aren't even that low by EU means, at least for locals working local jobs. A friend advised me last March to "buy an apartment before the flood / US election" - but no, I'm not buying into the hype. Fix your political issues overseas or be welcome by paying a fair premium adjusted to the higher income and earn respect by becoming part of the community / learning some Spanish. There needs to be some entry barrier / incentive / application process. In general I can understand why the Spaniards resist. Of course debatable whether it should be all non-EU or simply a list of significantly wealthier countries / countries with high wealth gap and oligarch investors that pay the higher entrance fee.

162 points by vinni2 2y ago

bborud 2y ago

Would it work or would it just make things worse?

krupan 2y ago
It will make things worse
ilya_m 2y ago
Easy! It won't work and it would make things worse.
- bborud 2y ago
  I was hoping for someone to share a bit of insight on why they think so. (I too suspect it will not achieve the desired outcome, but I had hoped someone could shed some light on the particular conditions in Spain rather some default answer)

affinepplan 2y ago

so is there any actual evidence that foreign home ownership is causing meaningful housing price inflation in Spain? or is this just uninformed pandering like it is in the US

nsklab 2y ago
For the last years we’ve had 500K immigrants coming every year. That’s what’s causing inflation.
- hjgjhyuhy 2y ago
  Printing massive amounts of money is what caused the inflation.
  - nsklab 2y ago
    I was talking about housing inflation specifically. Housing has increased in price more than the rest of goods plus it’s been increasing in price for a long time, long before covid. Adding millions of people and not building anything makes housing prices skyrocket. One of the two needs to be dealt with and, since immigration also makes salaries plummet for the most vulnerable, why not kill two birds with one stone.
scotty79 2y ago
Do you need specific evidence that additional demand causes price increase when the supply is pretty much fixed?
- draw_down 2y ago
  [dead]
stavros 2y ago
What's causing it in the US?
- rvnx 2y ago
  In Canada potentially Chinese immigrants in Vancouver/Toronto, in the US it's an over-generous monetary policy (through low interest rates, especially during COVID)
  - affinepplan 2y ago
    in Canada, like in the US, it's a lack of supply mostly because of draconian zoning and land-use policies. Chinese immigrants are NOT the primary cause of housing cost inflation, and are likely not even in the top 10 causes.
    - OJFord 2y ago
      I don't know or claim that it's any truer, but I thought the oft-reported reason, for Vancouver/BC especially, was Chinese investment, and explicitly not immigration even, the chief complaint that the growth has been/is expected to be such that they're left unoccupied?
      - _whiteCaps_ 2y ago
        This is my experience. The two houses that I share a backyard fence with are empty. A caretaker comes by once a month to have a look around one of the houses but otherwise they're unoccupied.
      - qball 2y ago
        >for Vancouver/BC especially The ALR bans any and all significant development in BC. Land is not scarce in BC; land that it's legal to build on is.
        OJFord 2y ago
        Ok - I'm not Canadian, idk what ALR is - I'm just saying what's disagreed with up-thread isn't what, in my experience, is the common claim (whether it's correct or not).
Retric 2y ago
Meaningful is a weasel word here. Even 0.1% price increase which would be impossible to measure directly still adds up across the entire housing sector. But, equally important is simply the number of natives prevented from buying the home they want because someone is getting a vacation property.
- renewiltord 2y ago
  Yeah, you have 0.1% of a house, sure. But do that across a thousand houses and you have 100% of the houses. It's that simple.
  - Retric 2y ago
    500$ on a 500k house might not seem like a big deal, but I’d still rather have the 500$.
- egwor 2y ago
  I think I read 20,000,000 need housing and this will impact 20,000 per year so broadly the numbers are inline.
  - throwaway2037 2y ago
    How can 20M be even remotely correct? Spain has a total population of about 48M.
- kasey_junk 2y ago
  But you also need to measure the dampening impact on home building. If builders would have built N units knowing they could easily sell some % them to foreign buyers but now they can’t, then you might lose the whole supply. And all the knock on effects for contractors, suppliers, etc
  - Retric 2y ago
    Cities are rarely constrained by the willingness of someone to build housing, it’s generally more an issue of being allowed to build housing.
yeknoda 2y ago
Depending on the market, market prices can be decided by a very small number of transactions that set things. Probably true for houses in Spain (limited supply) and foreign wealthy buyers (very high potential demand)
rolothrow 2y ago
Totally anecdotal, but I live in the largest city in Spain, and even in my residential area (as opposed to the touristy spots) every week I can see ads for "we buy your house, paid upfront over market value, Chinese investors". Posters in walls, flyers in windshields and so on.
- CommanderData 2y ago
  This is excellent, assets like property don't grow on trees and needs to be protected from foreign investors. Absolutely need something like this in the UK.
  - matt-p 2y ago
    I think the ship has sailed, but regardless isn't it all meaningless? Surely they can setup a company to get around it, or will be ban all foreign ownership of shares too?
    - zdragnar 2y ago
      Land is a public good, insofar as "buying" the land still comes with obligations to the state (paying taxes, conforming to building codes and zoning regulation, etc). Just because you "own" it doesn't actually mean you can do as you please. Given all of that, it is not unreasonable to limit or outright prohibit foreign ownership of land, or ownership of land by companies which are not majority-locally controlled.
      - matt-p 2y ago
        It's interesting, I just think the second order effects might be a bit scary. Having said that I guess for FDI there's always the option of getting a local company to "JV" with like in China.
    - CommanderData 2y ago
      Assets cant be shipped overseas. They are here, in the UK. That's the beauty of it. Taxes can force them back to UK ownership. The rich are buying the only asset the middle class will ever probably own, housing.
matt-p 2y ago
Of course, it's just more demand, like immigration, aging population and so on. Of course those are a much more difficult target..
iforgot22 2y ago
Even if it does, I don't see why it really matters. Cost of living has nothing to do with the value of the land you live on. Maybe the real problem is foreign investors leave the property vacant?
jopicornell 2y ago
In my hometown, Palma, in Mallorca, I live in a street where 50% of houses are owned by foreign people or investors/airbnb. The neighborhood is not 50% but not that low. The problem? Prices skyrocketed, like a 10x in 10 years (for big houses, small houses 4x). I hear more english/german/sweedish than spanish (or catalan) in my dog walks. Besides economic implications (a lot for local people trying to find places to live), there are cultural/social implications. The neighborhood used to be a community, where people were open to help and share. Now this is changing and evolving into an individualist neighborhood. Our oficial language is being minoritized even more. This doesn't seem like the neighborhood we used to live on. Not everything is economy. The intangible heritage is something we should take care more.

kjsingh 2y ago

what about corporate ownership?

WalterBright 2y ago
In order to justify a corporate purchase, there needs to be a return on investment. A vacant property is not that.
- jfghi 2y ago
  I disagree. The large corporations in total own hundreds of thousands of homes in their portfolios. The value of renting or selling can be boosted significantly by introducing scarcity on the margins between supply and demand. A vacancy of a small percentage of the portfolio can ensure the rest of the portfolio is worth much more. To elaborate a little further, it’s not necessarily the act of having it sit empty but rather keeping the pricing high regardless of whether the property stays empty. That becoming industry standard becomes a recipe for prices spiraling out of control, at least for a bit of time.
  - WalterBright 2y ago
    Pricing high just means opportunities for others to undercut it and snatch away the business. Check out those owners of vacant office buildings lately. Oops.
inetknght 2y ago
> what about corporate ownership? Homes, and real estate in general, should not be an investment vehicle. Screw those corporations.

nozzlegear 2y ago

Just tax land value.

jedberg 2y ago
How do you calculate the unimproved land value? This is an interesting question with the fires in LA right now. Is the land still as valuable as it was before the house burned down, minus the rebuild cost of the house? Or is the value intrinsically tied to the community that was there but no longer is? Or is the value actually higher now that a developer can come in and remake an entire neighborhood?
- fastball 2y ago
  I definitely recommend reading Lars Doucet's treatment[1] of this subject. You can skip to section 5 if you want the most direct answer to your question, but the whole thing is worth reading. The short answer is that there are many ways you can assess unimproved land value. The "Multiple Regression Analysis" method I think is the most relevant here: you'll see from the linked article a table that includes all sorts of factors related to both aspects you mention: factors of neighborhood/community (some positive, some negative) and factors of potential (some positive, some negative). e.g. there is even a factor of "Proximity to natural disaster areas", which would definitely decrease the land value after this LA-area disaster. In this particular case, I would expect that Land Values would go down after the fires, as there are many more factors related to positive neighborhood features (which no longer exist if the neighborhood has burned down) than there are factors related to "development potential". Though of course it also matters how you weight these things. Anyway read the article, my summary does not do the subject justice! [1] https://www.gameofrent.com/content/can-land-be-accurately-assessed https://www.gameofrent.com/content/can-land-be-accurately-as...
- behnamoh 2y ago
  Interesting game theory situation: - if land value depends on the community that was there, then owners would all have incentive to rebuild their burnt down houses to regain the values. - but owners probably realize most owners will sell their property as soon as things are back to normal. that would reduce the value of surrounding houses. - so owners will rebuild as fast as possible, probably cutting lots of corners, just so they won't left behind to sell. - some people start selling their houses but the late comers realize it's not worth it for them to sell it because the value has dropped a lot. so they stay. - the new owners move in to the area and house prices go back up.

golergka 2y ago

I want to make sure I understand this correctly. If you bought a house a few years ago, Spain will effectively rob you of it now? Or will it only apply to new purchases, so you'll have to pay x2 market value if you want to buy one? If it's the former, than even flaunting such a plan is a complete catastrophe for any foreign investment in Spain from now on. But if it's the latter, it'll just bring to life a whole industry of middle-men, which will use their EU residency to buy property in their name to be used by other people. Both ways, it's yet another attempt to force a market to do something that will lead to either disastrous, or just bad results.

egwor 2y ago
believe it is new purchases
gruez 2y ago
>If it's the former, than even flaunting such a plan is a complete catastrophe for any foreign investment in Spain from now on. There's investments that don't involve real estate. Moreover, property isn't a productive asset, so discouraging investment into that is arguably a good thing. Investing money into a factory means you get more stuff produced. Investing money into property just... sits there.
- WalterBright 2y ago
  > property isn't a productive asset It is when you rent it out.
  - yoyohello13 2y ago
    Literal rent seeking behavior from foreign investors.
  - iforgot22 2y ago
    In theory, the market should push owners to rent when prices stabilize. Eventually. In the meantime, it's possible that some foreign investors don't care too much about the opportunity cost. I think some kind of vacancy tax is the only good way to fix this if it's a real problem.

somewhereoutth 2y ago

Another (better?) target should be homes used for short term let - i.e AirBnB etc. Homes have such extreme valuations because of the underlying cash flow (or 'rent' in its most abstract sense). Without tourists willing to pay many multiples of what they'd pay at home for accommodation, that cash flow wouldn't be there.

icegreentea2 2y ago
The article says they are also targeting tourist rentals.

rbjorklin 2y ago

This will undoubtedly make some brexiteers very unhappy.

ipnon 2y ago
It's quite funny because Great Britain is the reason why the Spanish won their war of independence.
cmsj 2y ago
Good. I love this for them. Source: totally not still bitter Remainer.
- spacedcowboy 2y ago
  Seconded. Bastards.
- Gvaskas 2y ago
  [flagged]
floxy 2y ago
Is that because: A.) There is significant overlap between Brexiteers and those with enough extra wealth to afford vacation / second homes in Spain. Is there any way to quantify this? I would have thought that those with a nationalistic bent wouldn't be keen to own homes in foreign lands. Plus I had the impression that the Remainers were more towards the urban, wealthy, citizen-of-the-world types who would at first blush seem more likely to buy houses elsewhere. B.) The Brexiteers were hoping that the Remainers would all move away, so they don't have to deal with them anymore? C.) The Brexiteers want to colonize Spain? D.) Brexiteers wish they would have thought of the idea punitive taxes on foreigners first? E.) Other?
- johannes1234321 2y ago
  There is a notable amount of "expats" who permanently moved to Spain under freedom of movement, then voted for Brexit and then were angry that Spain/EU started to treat them as foreigners. How many hundred that are I don't know, but they made "fun" news stories during those times.

mhandley 2y ago

Anything to stop a non-EU resident owning an EU company that owns a Spanish home?

matt-p 2y ago
Of course not! Such an insane plan.
rapatel0 2y ago
One of the more effective (but potentially over reaching) parts of EU law is that the governments usually give enforcement powers with discretion on how to enforce them. On the one hand it’s annoying because there are no clear rules for how to do business at times. On the other hand, it does typically do a better job of articulating the “spirit of the law” and not allowing people to hack around the letter of the law. I’m pretty sure if using a hack became a trend, then they would start suing people in a few years down the road and extract all the money.
V__ 2y ago
It's not trivial to set up a business as a non-eu citizien. As far as I know every EU business has to have an eu citizen representative. Additionally, a company owned property can't just be used privately.
- gruez 2y ago
  >As far as I know every EU business has to have an eu citizen representative You can't hire a nominee director? >Additionally, a company owned property can't just be used privately. They can't "rent" it back to the owner?
  - ajb 2y ago
    That sort of thing is a bit risky. One company I followed was bought out by a US vehicle owned by a Chinese investor, and then everything ground to a halt because (it appears[1]) the local agent fraudulently changed the bank accounts into their own name and locked out the owner. Operating stuff in a foreign legal jurisdiction is hard. [1] this seems to have been the judgement of the court, but not all the fillings are free to access.

WeylandYutani 2y ago

Average house price in Netherlands is 500k. If you offload your house to the next sucker you can still outbid most people when you move to Spain as a pensionado.

nayuki 2y ago

That's essentially an export tariff.

Terr_ 2y ago
Perhaps if they were mobile homes. :p The comparison breaks down a little further with cases where the foreign owners just rent the home out.
- gruez 2y ago
  >Perhaps if they were mobile homes. :p Tourism counts as an "export" even though everything stays within the country's borders. >The comparison breaks down a little further with cases where the foreign owners just rent the home out. So... an investment tax?
  - Terr_ 2y ago
    Hmmmm, kinda? AFAIK usually an investment tax is on gains, so "you must pay X% when purchasing an the capital" tax seems pretty unusual, or perhaps it exists under some other term. It's not quite a usual sumptuary tax either... I'm assuming it's more about ownership than usage, since it doesn't hit local landlords, and there are already visa/immigration systems if it were a matter of people-movement.

switch007 2y ago

Ah yes the playbook to distract from immigration, and lack of house building, ie the policies designed to increase house prices

go13 2y ago

[dead]

throaway2501 2y ago

Canada should follow suit

switchbak 2y ago
BC has already implemented actions to limit foreign ownership without them actively living in the residence. Probably more to be done though, but one needs to be careful about unintended consequences.
- throaway2501 2y ago
  like house prices falling to affordable levels?
  - bluGill 2y ago
    That is the intended and predicted concequence. unintended is things you didn't think of and they can take a long time to appear.
    - throaway2501 2y ago
      as a canadian, i’m willing to take the chance (s)
- duxup 2y ago
  >without them actively living in the residence This seems like it would be a bit of a difficult thing to police as far as foreigners goes.
  - throaway2501 2y ago
    an “unintended” consequence
swat535 2y ago
They did but they left so many loopholes that was it was basically pointless. Foreigners simply started making an incorporation or using any of the quick "PR" schemes to be able to purchase a property. Many people will even pool money from the multiple families if need be to purchase residence and then renting it to Canadian citizens for profit or putting on AirBnb.

desireco42 2y ago

This is equivalent from seizing the properties... I can't imagine this or something similar working well for Spain at all. It will just kill inflow of capital and they will alienate anyone willing to work with them. Advantage of Spain is that it has good climate, prices are not high and it is lawful country. As soon as you trip this last one, it is the same like some 3rd world country.

louison11 2y ago

Blaming foreigners for housing prices is misdirected. The real culprit is slow bureaucracy & zoning laws making it impossibly slow to get a permit to build anything in both Spain and Portugal. Both of these countries for example have so many abandoned houses needing to be renovated, and so many foreigners coming in with money to do it - but they can never do it because you can't get a permit in literally forever... I don't know about Spain, but another problem in PT is the building companies too, are unreliable, and typically don't deliver houses in less than 3-5 years if you decide to build new. Increase the supply, and the prices will go down.

WorkerBee28474 2y ago
No, that argument assumes you can only blame 1 thing at a time. Even if the bureaucracy is the worst offender, every foreigner buying a house still results in 1 less house for Spaniards. Sure, fix bureaucracy, but don't pretend foreign purchases have zero effect.
- AuthorizedCust 2y ago
  If you’re in oversupply, as the parent comment suggested, then is the effect of additional buyers meaningful?
  - WorkerBee28474 2y ago
    If you have extra supply of houses needing renovation, as in the comment, and renovations require labor and/or materials to complete, having foreigners pay to renovate houses to be livable will decrease the ability of Spaniards to renovate houses to be livable. For example, let's assume renovations are 100% completed by local crews. Any crew working for a foreigner is working for them because A) the foreigner is paying more than a local for the work B) the foreigner is paying enough to make a profit and the local isn't (which is a subset of A). There is no situation in which adding foreign money results in more houses for locals. If you eliminate the ability for foreigners to renovate, the renovation crews will take the money that the locals can pay. There will be fewer renovation crews, because some crew will not be profitable at the lower rate, but more crews working to renovate houses for Spaniards. Similarly, for materials, given supply and demand curves (and assuming that the marginal units added won't cause economies of scale) eliminating the ability for foreigners to buy materials for renovations will move the curve intersection down to a lower price and volume.

rednafi 2y ago

The issue is that countries expect foreigners to bring in money, earn a lot, and pay taxes at the 90th percentile, but they’re (the locals) reluctant to share resources in return. A 100% taxation model turns it into a one-way street. Sure, if you don’t need foreign investment, you can afford to do that. But let’s be real—welcoming foreigners isn’t an act of charity. Governments usually do it because foreigners are often more productive, pay higher taxes, or fill jobs that locals don’t want. Turning it into a one-sided deal has consequences. Immigration policies are funny; every western country treats them like a magical cure-all, only to later blame immigration for any and every problem.

ralsnop 2y ago
If India had 25% white EU members similar to Sweden having 25% migration background members (mostly from Africa or the Middle East), perhaps Indians would get a tiny bit protectionist. The accusation that locals are reluctant to share resources is offensive at this point. There is no space and people can barely afford to pay rents. Meanwhile there are "golden visas" to Portugal or Cyprus where rich Chinese can gain entry to the EU and buy up everything. For a token "investment" like buying stocks to the tune of EUR 1,000,000. They do not exactly build a semiconductor fab. Again the myth that "foreigners are more productive". Where does that come from? West Germany did just fine before 1990, everything deteriorated since then.
- JambalayaJimbo 2y ago
  What does whiteness have to do with anything?? Indians are protectionist, with regards to immigration from poorer countries like Bangladesh.
  - rednafi 2y ago
    Umm what? India has a lower per capita income and worse quality of life than Bangladesh. https://countryeconomy.com/countries/compare/bangladesh/india?sc=XE34 https://countryeconomy.com/countries/compare/bangladesh/indi...
- 2y ago

whatever1 2y ago

Enforce taxes for non occupancy instead. Like €1000 per day that a property is not occupied. Currently the excepted cash flow of buying some property and locking it empty is positive. We need to make it VERY negative.

saguntum 2y ago

The English language reporting on this reform proposal is not comprehensive. Here's an article on it by one of the national papers of record, El País: https://elpais.com/espana/2025-01-13/sanchez-anuncia-una-intervencion-del-mercado-desbocado-sobran-airbnb-y-faltan-viviendas.html https://elpais.com/espana/2025-01-13/sanchez-anuncia-una-int... Some interesting tidbits from the article: - Some local governments, which are run by a party opposed to the governing national party, oppose the existing laws regarding price regulation and refuse to enforce price caps. This is possible because Spain has a lot of power devolved to local governments. The proposal attempts to side-step local governments by giving property owners a 100% income tax rebate if they abide by national price regulations for their properties. It essentially incentivizes individuals to enforce what regional governments are supposed to be implementing. - Spain's public housing inventory is low compared to other European counterparts - Spain's at 2.5%, France at 14%, Netherlands at 34%. - There are some comparisons to the construction rates during the 2000s housing bubble and how the inventory has shifted between single and multi family dwellings. - The measures include plans to promote prefabricated/modular housing as it is much cheaper to produce at scale. Sidestepping uncooperative local governments is an interesting technique given their devolved system of government. I would also be curious to see how prefab/modular housing measures develop. If they are combining some old school "price cap / limit foreign investment" strategy with a pro manufactured housing YIMBYism, that would be kind of unique. From my quick scan of the article, the 100% tax on non-EU residents isn't even reported on. The reform is much more comprehensive and, in my mind, likely to get passed in some form even if the 100% tax gets cut from the final bill. There are also some less than factual opinion statements like this dropped in the Guardian's article: > Given his government’s longstanding struggles to pass legislation, one analyst suggested to the Financial Times that the government’s aim was to deter foreign property investors by creating “uncertainty and noise” with a proposal that has slim chances of becoming law. IMO this is under-selling the current president's political survivability, regardless of what you think of him or his policies. He is currently in power because he convinced a separatist Catalonian party whose leader is exiled from the country to join his coalition. I'd rather not get into it on HN, but read about his tenure for yourself. The Guardian's article is not a good enough summary of what is being proposed and is not giving thorough enough context.

2y ago

icar 2y ago

Houses should not be an investment, but only used for what they are: a place to live. That's directly opposed to why someone not local would buy them. This fall short, it should be straight up forbidden, also for EU residents (who are a big issue as well, looking at you German and French people that buy houses, leave them empty all year but 1 month and/or don't even learn the language and traditions of that place)

omnimus 2y ago
I think EU is ok as many people actually live somewhere else thanks to EU laws. What should get hard taxed is owning multiple homes. There are people with 100s flats not even under a company but an individual. And companies that do own homes as business should be stevards of properties with max profit margins - it can be good business but not unhinged money printer it is in becoming everywhere.
- SergeAx 2y ago
  So, companies should not be allowed to build new multi-flat houses? Or should they be forced to sell them the moment the building is complete?

chainmail2029 2y ago

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philjw 2y ago

Good - even as EU citizen from a "wealthier" country who also considered buying an apartment in Spain I felt put off by the sheer amount of non-EU citizens taking the easy and cheap route out, coming over to sunny, walkable and high quality of life Spain with good public health system and showing their excitement about the "low prices" - which aren't even that low by EU means, at least for locals working local jobs. A friend advised me last March to "buy an apartment before the flood / US election" - but no, I'm not buying into the hype. Fix your political issues overseas or be welcome by paying a fair premium adjusted to the higher income and earn respect by becoming part of the community / learning some Spanish. There needs to be some entry barrier / incentive / application process. In general I can understand why the Spaniards resist. Of course debatable whether it should be all non-EU or simply a list of significantly wealthier countries / countries with high wealth gap and oligarch investors that pay the higher entrance fee.