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Plans for an “excessive” hike in property taxes in Spain will probably be a blow to consumers from the UK and will immediate them to think about options resembling Cyprus and Greece, specialists have mentioned.
Measures being proposed in Spain to ease pressures on its housing state of affairs embody an as much as 100% tax on properties purchased by non-European Union residents.
Toby Leek, president of property professionals’ physique NAEA Propertymark, mentioned: “Many Brits could take the information of heightened property taxes in Spain as a blow contemplating transferring to such a location may effectively have been a lifelong ambition, particularly with the handy location and, in fact, the improved climate it gives.”
Many Brits will probably be delay by this excessive hike in property taxes and will probably be trying to different international locations resembling Cyprus and Greece with decrease property tax ranges for his or her dream house transfer
Toby Leek, NAEA Propertymark
He mentioned that, whereas it may be appreciated that Spain is addressing its personal housing emergency and taking care of Spanish residents, the proposal is “fairly an excessive improve”.
Mr Leek added: “Many Brits will probably be delay by this excessive hike in property taxes and will probably be trying to different international locations resembling Cyprus and Greece with decrease property tax ranges for his or her dream house transfer.”
Spain’s Prime Minister Pedro Sanchez has been quoted as saying the general objective is to offer “extra housing, higher regulation and higher assist”.
Non-EU residents purchased 27,000 properties in Spain in 2023, “to not dwell in” however “to earn a living from”, he mentioned.
Like the UK, Spain has been coping with pressures on housing prices.
Rents are seen as a selected challenge in main cities resembling Barcelona and Madrid, whereas home costs have additionally been rising.
Levels of tourism and short-term lets have been seen as compounding issues.
There are many different jurisdictions trying to entice rich retirees and buyers. For instance, Dubai has been known as the ‘new Marbella’
Seila Sanches Lucas, lawyer
Seila Sanches Lucas, a lawyer at worldwide legislation agency Broadfield, who helps purchasers purchase and promote property in Spain, mentioned: “The proposal by the Spanish Prime Minister will probably be regarding for people who have already chosen to retire in Spain and for these contemplating a retirement within the solar.
“It is only a proposal at this time limit and isn’t assured to make it onto the Spanish statute books.
“Even if adopted, the legislative course of in Spain is tortuously gradual and it’s maybe slightly early for UK nationals to fret about this proposal.
“If adopted, there are lots of different jurisdictions trying to entice rich retirees and buyers. For instance, Dubai has been known as the ‘new Marbella’.”
Isobel Neilson, director at legislation agency and international immigration specialists Fragomen, mentioned that if the proposals for a 100% tax on house possession for non-EU nationals had been to be launched, “our purchasers would most certainly look to hire as an alternative of shopping for or alternatively discover different extra beneficial EU jurisdictions”.
She mentioned folks could look in direction of Portugal or Italy, for instance.
Stephen Abletshauser, personal consumer companion at Spencer West LLP, mentioned: “This populist transfer by the Spanish authorities could effectively show to be a long-term personal objective.
“The likes of Turkey, Italy, Malta, Cyprus and even France will welcome this determination in a fiercely aggressive marketplace for rich non-residents retiring within the sunshine.”
