Spain proposes 100% tax on homes bought by non-EU residents | Hacker News Reader

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

theguardian.com

162 pointsvinni2265 comments

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.

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.

If you’re in oversupply, as the parent comment suggested, then is the effect of additional buyers meaningful?

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.

> There is no situation in which adding foreign money results in more houses for locals

Assuming fixed supply, yes, it's (probably) a zero-sum game.

> eliminating the ability for foreigners to buy materials for renovations will move the curve intersection down to a lower price and volume

Assuming a frictionless market and no economies of scale, yes. In reality, you'll have a smaller set of options for locals at a slightly (but not dramatically) lower price. (Again, for an example look at all the markets foreign investors shun.)

> 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

You absolutely cannot conclude this from first principles.

You make valid points. They just need to be followed up with data. The systems you're talking about are too sensitive to generalise like this.

I'm not saying it has zero effect. I'm saying it's a misdirected effort that would cause them more harm than good. Spain isn't exactly in the fittest economic position. It needs to attract foreigners to cultivate its growth - hence their Beckham law and other benefits for foreigners. You can deter people from coming and see the country stagnate/go down, or you can actually match the demand and foreign dynamism, and use that as an opportunity for the whole place to grow and modernize.

How does allowing *non-residents* to buy real estate help in attracting foreigners and cultivate growth?

In a hot real estate market, there will be more market pressure to fix the dilapidated properties in good areas.

Say they instead keep values artificially low so an EU resident can buy a property for cheap, and it stays cheap. What's the benefit?

The benefit is that more people can afford to buy houses? Really surprising to see a country taking care of their people, and not just the wealthy ones!

All the hypotheses claiming that "the market pressure will improve things for all" have been proven false at this point. We have decades of data, and this is only widening the inequality gap.

I don't see why this is better than people renting and investing their savings elsewhere, which is how it works with apartments anyway. So you own a house, it makes basically no return, now what?

where exactly does a house make no return, especially in say last decade/15 years? I bought three houses in the last 20 years, one doubled, one up 70% and one 40% (still occupying it)

In the US, not many places. But that's the complaint from some people.

give me some places where it is not and we’ll look at zillow or whatever public data there is for a given region. unless we are talking like rural-no-is-around-for-miles perhaps but otherwise properties over the last 10-15 years have appreciated

Do you not see how insane it is to at once 1) demand cheap housing and 2) demand it increases in price at breakneck pace?

I am not demanding cheap housing, I was only commenting on so you own a house, it makes basically no return, now what?

I'm saying that if they find a way to keep houses affordable to buy, they can't be viable investments. The US makes for a decent home investment market. You usually see a house price double every ~10 years once it's in a desirable area.

Btw, was your 40% increased house purchased 20 years ago? If so, that's effectively a loss, and I'm not even sure about the one that doubled. 5-10 years would be different.

Exactly, it's like complaining that gold is unfairly expensive. Those lucky Boomers got to purchase it at $40/oz in 1970 ($350/oz in 2025 money), now it's $2600/oz. I should be allowed to buy gold for $350/oz so I can profit like they did.

in 2050 when it is $13,764/oz kids will be complaining you got to buy it for $2,600

Is the only reason you see for home ownership price appreciation? This mentality is what’s wrong with speculative real estate!

Yes. I don't know how you can buy something and hold it for decades without calling that "speculation."

You buy it so you can live in it, I am also not speculating when I buy a cabinet that I also hope to keep for decades.

Living in a house doesn't consume it along with the land, hence the investment appeal. You can rent a house if you just want to live in it. I would totally rent a cabinet if that were a thing, but it's not because the value goes to 0 quickly.

> The benefit is that more people can afford to buy houses?

Can they? I mean, what is your plan to lower current housing prices? Cut off demand from foreigners with purchasing power and instead replace it with demand from people who cannot afford a home? They are not even the same housing market, are they?

Money invested from abroad is money coming inside the economy - whether the person lives there or not. That money goes to the seller, who'll then get taxed on it, spend it somewhere else... Or that money could be used, as I said, to build new buildings and rehabilitate old ones, thus creating jobs in the process. If the system was well set up for it, foreigners investing in a country is usually a good thing. The US is super foreign-investment friendly for example, doesn't hurt them.

Besides, if foreigners are investing solely to speculate - if they did fix the supply constraints, the opportunity for speculation would greatly decrease. It's only an attractive investment because the supply is so finite.

Worked great for Vancouver /s

To be fair, you're referring to one of the largest and fastest-growing economies in Canada [1]. (It also has a massive affordability crisis despite a ban on non-student foreigners buying expensive real estate.)

[1] https://www.katrinaandtheteam.com/blog/vancouver-bc-economy/

Half the people in Vancouver are thinking about leaving and 25% want to leave within the next 5 years. People are leaving in droves largely because of costs. That seems to make the parents point - that the ecnomic benefits from immigration accrue to the few and the wealthy while making life harder for average people

https://vancouversun.com/news/survey-finds-half-of-metro-van...

I can sympathize with it because I live in Toronto and am also thinking about leaving. Do I hate immigrants, no there aren't actually that many immigrants in the city core where I live. But certaintly there is an affordability crsis that has gripped the city and the country and wages seemed to be supressed and there seems to be less job opportunities (likely due to all that extra labour coming in)

Vancouver's population has been steadily increasing. Maybe it's catering to different people than before, but it's not fewer.

Alternatively, I got my current house because of KYC laws.

The house bidding was originally won by someone abroad. They overbid the house by a lot. However, because of the KYC laws, that person needed to proof their income is legitimate, which they couldn’t. Therefore, we got the house.

Building new houses costs 10 years in my country. So building new houses is not fast enough to create new affordable houses.

This is a quick "fix" that has a lot of unintended consequences. I've seen it first hand and the only people it benefits are those who are already wealthy. Everyone else gets a lot poorer as their cost of living skyrockets. Homelessness explodes as rents and housing costs increase dramatically, people who were living a humble but decent life before are pushed into poverty, crime both non-violent and violent increases and so does drug use. As far as I can tell the only people that actually benefit from this scheme are landlords and housing developers who slow walk their projects so that they can charge the maximum price per unit. Compared to the previous fairly stable state (which you call stagnation) the locals are much worse off. It also tends to ruin the character of places that were previously seen as a vacation destination for a unique experience, all of that just gets paved over and turned into a bland tourist trap barely different from any other place. Count yourself lucky if you live somewhere that has been passed over by this horrid money making scheme.

So would you say it's fair game to blame "migrants" for crimes? After all, you can't steal something if you're not in a country, so letting someone into a country strictly increases the crime rate. Even if migrants commit crimes at a lower rate than the local population, unless it's exactly zero, it'll still increase the crime rate.

edit: downvoters, I'm not actually endorsing blaming migrants. It's only used as an example.

Do crimes have a liquid market with supply and demand mechanics?

If so, then sure, you can blame every criminal for x% of every crime, I guess.

The comment was in reply to:

>Even if the bureaucracy is the worst offender, every foreigner buying a house still results in 1 less house for Spaniards.

It's pretty clear that supply and demand isn't a consideration here, and the commenter is strictly focusing on the aspect that one house is being removed from the housing supply.

If you remove a house from the supply, by any method, there is one fewer house in said supply.

> Even if migrants commit crimes at a lower rate than the local population, unless it's exactly zero, it'll still increase the crime rate.

But that assumes you do not count the person who commit the crime as part of the population count.

In this example, “crime per capita” goes down if they commit crime below the average crime rate of population before they joined that population.

>But that assumes you do not count the person who commit the crime as part of the population count.

Sorry, meant to say "crime count", or more precisely, "native victimization count". Natavists by definition prioritize the native population over immigrants, so if some native got victimized by a migrant, I doubt a natavist would be convinced by "well actually, even though there was one extra crime committed by a migrant, there's also 10,000 (or whatever) more people, so the crime rate actually went down!"

Every foreigner buying a house is supplying capital for one additional house to be built, and some portion of those additional houses will be unoccupied by the foreigner most of the year and available on the rental market for locals.

Even if it's just short term rentals, that means more affordable vacations and temporary housing for the domestic population.

This is one of those arguments that at face value seems quantitatively sound but doesn't survive first contact with reality

And your claim that it doesn't survive first contact with reality is based on you correlating high volumes of foreign investment with lack of housing affordability and assuming that the former is causing the latter, when the correlation is really due to a confounding factor.

Even if it's causing it, the city isn't vacant. There are people who can afford to live there. Only the people who can't afford it complain.

The issue not mentioned because it is a very politically charged topic is that, as I understand, net migration to Spain is at an all time high.

This is bound to push housing prices up.

Hitting foreign investors is easier politically but may not have much effect.

> every foreigner buying a house still results in 1 less house for Spaniards

In a very limited scope, sure. What that foreign capital also does is lower risk and thus capital costs for development and improvement. (In the event of a limited crisis, for lenders as well.) Whether the net effect goes one way or another is more complicated than what you describe.

Put another way, if foreigners could only buy unbuilt units, would you still say they're resulting in fewer houses for Spaniards? Do the countries shunned by foreign investors have affordable housing?

What is this contrarian sophistry? In Europe foreigners often buy the most expensive historical real estate they can lay their hands on.

If they do build something, it is office buildings for investment that take up space and often remain empty (Chinese are good at that). These investments still take up space and drive up real estate prices.

Where do you even live?

> In Europe foreigners often buy the most expensive historical real estate they can lay their hands on

Source? (I'm generally hugely sceptical of uniform statements about how capital behaves across the EU, let alone Europe.)

A source is not required for something to be true. An uncountable number of things that are true have no source to back them.

> A source is not required for something to be true.

If it was really true then why would you have so much trouble providing anything at all that would back it up?

Where's the source for your assertion? You're making a claim that foreign investment is beneficial with no source, but then requiring one when someone disagrees with you?

A theoretical argument was countered with an assertion - it's plausible that investment -> lower risk, but there is no reasoning to get "foreign investment is focused on X area".

"What that foreign capital also does is lower risk and thus capital costs for development and improvement."

Not a theoretical argument. An assertion.

I mean, I can see a reason provided. Isn't that the whole point of foreign direct investing? That's more than an assertion - that's why I call it a theoretical argument. There's no need to debate semantics.

For a lot of foreign investment, the point is to hide money. A lot of investment provides negative value. Hidden money in residential real estate inflates the market and in most of these cases they also leave the units vacant, reducing housing stock. In some cases it isn't to hide money, but instead for speculation, and usually in those cases they also leave the units vacant, because occupied units can reduce value, and in those cases it's also reduced stock and inflated markets.

> What is this contrarian sophistry? In Europe foreigners often buy the most expensive historical real estate they can lay their hands on.

Yes, they make real estate investments in luxury and high-end sector, some of which boarded up for decades.

It's not like your average working class citizen is on the house for a manor house in the city center.

These are not the same markets.

> Put another way, if foreigners could only buy unbuilt units, would you still say they're resulting in fewer houses for Spaniards? Do the countries shunned by foreign investors have affordable housing?

Exactly, and to further drive the point home the real estate investments driven by foreign investment are targeting entirely different markets, such as luxury homes and tourism, whereas the complains about lack of access to housing come from those who already struggle to buy the cheapest units in working class suburbs, where the foreign investments are clearly not being made.

So the question you should be asking is how come you're not seeing investments in affordable housing across the country at a time where you see foreign investment in luxury and tourist areas. Then you'd realize that you're discussing two entirely different things that bear no relationship.

Often, very often, foreign investment is directly correlated with tourism-gentrification, aka driving out the poor working class people from some location, because it looks "authentic" and is centrally located, into ugly looking places at the outskirts of the city.

But this can happen whether people from outside buy it or not. As long as there is demand for tourism, and some countries are richer than others, this will happen.

Foreigner purchase effects are complex.

While a unit sold does immediately reduce the supply by 1 unit, new demand and foreign funds can also stimulate more building and, especially important, can prevent areas falling into disrepair and becoming ghost towns. It really depends on the specific area and situation. My 2c.

You could also argue that every Spaniard moving from the countryside to the cities takes away houses from Spaniards born in the cities.

Seems like an argument for internal visas like China's household registration system to prevent excessive migration to the cities.

The countryside is mostly emptying out so no need to prevent people moving or buying there.

> Seems like an argument for internal visas like China's household registration system to prevent excessive migration to the cities

With the big difference being the Chinese citizen being denied Beijing hukou is still a Chinese citizen. Madrid should properly first concern itself with Spaniards' wellbeing. (This isn't an argument for or against this policy. Just clarifying why restricting non-EU home purchases is different from hukou.)

That comparison make sense in a world where the well being of a nation's citizens wasn't the priority of a nation.

However we live in a world where that isn't the case so a nation deciding to restrict immigration or economic activity by foreigners for the benefit of the domestic population is an acceptable position to take -- provided it actually have that desired outcome.

Spoiler: it won't help much.

Liberalizing zoning and taxing land would do more to improve housing affordability.

> Even if the bureaucracy is the worst offender, every foreigner buying a house still results in 1 less house for Spaniards.

Just to be pedantic, it's not about foreigners buying property, it is about non-resident buying properties.

A foreigner that actually resides in Spain would not be taxed, if I understand correctly.

I don't think that limiting property ownership to residents is a bad thing. I do think, however, that it will not have that much impact in the properties the average people actually need and want.

> every foreigner buying a house still results in 1 less house for Spaniards

Absolutely not. For example my impression is that foreign demand has been great for the construction industry, both small and large, both in Spain and Portugal. Paying lots of people directly and still more indirectly. The presence of all these buildings that needed renovation (or demolition) shows that the population previously could not afford to use them. Dumping money in the economy causes some inflation, yes, but it also pays many people and allows still more to enter the field.

I have various thoughts. The rough one is that investors driving up the cost of housing increases the countries labor costs. Which harms it's competitiveness. Reduces workers standard of living. Which also causes headaches for political leaders.

Foreign investors rub salt in the wound by moving their gains outside the country. And the real risk that they will flee when there is any sort of downturn making it worse.

My opinion giving those guys the middle finger isn't unreasonable.

But the foreign investors are doing it because the housing market has an artificial supply shortage. They are buying into a cornered market.

Of course, full deregulation is not a fix as seen with the condos built in ridiculous locations back in the sub-prime mania.

It would be good to have a reasonable plan. Sadly the plans for making livable neighborhoods was hijacked by the "15 minute city" WEF-style politicians. The Netherlands had some very interesting projects that went pretty well.

I donno if it entirely wrong to blame foreigners. If you have a bunch of silicon valley digital nomads flying to Spain and buing and selling houses to each other I can see how that could easily leave locals out of the housing market. That seems like something that government should control against if locals can't affording housing.

I imagine that if a bunch of rich people decided to treat Spanish homes like stocks (holding and flipping) it would be pretty easy to get high prices and bubbles. Doesn't it follow from suppy and demand?

>Increase the supply, and the prices will go down.

what's wrong with tackling both demand and supply. Why shouldn't spain do both - build more homes to tackle supply while also curbing foreign home ownership to tackle infalted demand

Bloated/unnecessary bureaucracy is essential to the bribe collection process.

> 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...

Are these hypothetical houses located in the places these hypothetical foreigners want to live or invest? Because getting a small apartment in Barcelona is a small feat, and Soria is not exactly an alternative.

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.

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.

What does whiteness have to do with anything?? Indians are protectionist, with regards to immigration from poorer countries like Bangladesh.

Umm what? India has a lower per capita income and worse quality of life than Bangladesh.

https://countryeconomy.com/countries/compare/bangladesh/indi...

I completely understand the need for protectionism. That said, Sweden's immigration policy ranks among the worst in Western countries. I'm not saying there shouldn't be any pushback; rather, my point is that these policies are exploitative on both ends. Why bring in refugees in the first place? And if you do, why bring them in en masse?

The US handles a much larger number of migrants each year and consistently attracts the cream of the crop. I'm not saying the US doesn’t have issues with migrants, but during my time living there, I didn’t find the situation as severe as in Germany, Sweden, Spain, Portugal, or Italy.

Europe's immigration policy is broken. Many immigrants end up draining the social welfare system, overcrowding service providers, and causing religious tensions. But let’s be honest: everyone knows which group is primarily responsible. It’s extremely difficult for that group to enter the US. At the same time, it’s much easier—though still not trivial—for skilled migrants to move there. In Germany, the situation is the opposite: it’s trivial to enter as a charity case but much harder as a skilled migrant.

If you can afford to reject immigration, you're free to do so. America can’t, and they’re profiting from it. But why adopt such a self-sabotaging approach, bringing in the worst of the crop and then blaming them for the country’s woes? That’s the part I can’t understand.

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)

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.

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?

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

Of course not! Such an insane plan.

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.

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.

>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?

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.

> the local agent fraudulently changed the bank accounts into their own name and locked out the owner

This sounds like a front more than a nominee. A front legally owns the company and has a side deal with someone conferring control. It's pretty much straight-up fraud. A nominee is similar to a Delaware registered agent; you pay a law firm or whatever a few hundred euro a year to be your glorified P.O. Box

I'm not really sure what the technical details were.

This is the complaint, in case anyone is curious: https://trellis.law/doc/159246087/complaint-case-initiation-... Although obviously that's only from one side.

If may be that it's less risky if there's a common service such as you describe, since the operator will prefer to keep their business going. But if significant assets are involved it may still be somewhat risky.

(This was the company that supposedly ended up with the IP of the Kestrel aircraft, formerly owned by Alan Klapmeier and originated by Richard Noble as the Farnborough F1)

> if significant assets are involved it may still be somewhat risky

No more than any asset in the EU. A nominee can steal your property about as easily as any notary.

Thee context here (and upthread) is about needing a nominee because you aren't in the country. IE if you were in country you'd control the asset directly.

> needing a nominee because you aren't in the country. IE if you were in country you'd control the asset directly

Yes. A nominee is just a local contact of record. If a nominee can steal your shit, any rando with a notary can, too.

Are you positing a corrupt notary?

The „owner” is the company.

He's saying the company could rent the building to the owner of the company.

It’s not really clear what they mean.

Person A sets up a company in foreign country.

Company buys a building in the country.

Company rents out the building to Person A.

Yes yes thanks

fine. "actual" owner, "ultimate beneficial owner", etc.

> You can't hire a nominee director?

Yes, you can, and it's very common. Couple hundred euros in Cyprus [1].

[1] https://blog.wamo.io/how-much-does-it-cost-to-open-a-company...

Yep.

I've a longterm "internet friend" and Cyprus resident/native who has been grumbling about this for two decades now, his principal complaint is the sheer number of Russians back dooring their way into becoming an EU company via Cyprus and screwing up the cost of living, housing, etc for the locals who suffer from the pressure of rich transients who do little for the community.

A common enough templte compliant the world over, but it has grounds.

He'll also admit it's not just the Russians but many others also.

> He'll also admit it's not just the Russians but many others also

Limassol is friendly to Russians. If you're American, the go-to is Ireland, though Luxembourg is trying to eat their lunch. (If you're Chinese, Hungary and Poland.)

In short, there are significant business opportunities for EU citizens willing to front an EU company for other non EU parties.

> significant business opportunities for EU citizens willing to front an EU company for other non EU parties

I'm describing plain-vanilla incorporation or the buying of an incorporated business. No fronting.

As a bloc, the EU should be encouraging Russians to move assets out of Russia because this reduces the tax base for the Putin regime. Do everything possible to destroy the Russian economy. Of course, this can have disruptive effects in some local areas like Cyprus.

I'm British and it's very easy to setup EU companies, many UK companies have HAD to due to Brexit.

>As far as I know every EU business has to have an eu citizen representative.

Not at all true, infact it's becoming the exception rather than the rule, look at; Estonia, Ireland, Netherlands, Cyprus, Bulgaria, Hungary.

Even in Germany I think it's beginning to become possible.

>Additionally, a company owned property can't just be used privately.

Um yes, the company rents it out?

"a company owned property can't just be used privately."

Why not?

It's illegal according to European Union law so this is just one more lie by Prime Minister Pedro Sanchez.

https://www.vozpopuli.com/economia/el-castigo-fiscal-a-los-c...

> It's illegal according to European Union law

Is this firmly established or contended?

Article 63 of the Treaty of Lisbon [1] bans "all restrictions on the movement of capital between Member States and between Member States and third countries" [2].

To define "movement of capital," we must look to Annex I to Council Directive 88/361/EEC of 24 June 1988 [3]. It says "purchases of buildings and land and the construction of buildings by private persons for gain or personal use," including explicitly "investments in real estate on national territory by non-residents" counts. Looks clear cut!

That said, there appears to be a long history of challenging what constitutes a "restriction," because EU.

[1] https://en.wikipedia.org/wiki/Treaty_on_the_Functioning_of_t...

[2] https://blogs.kcl.ac.uk/kslreuropeanlawblog/?tag=article-63-...

[3] https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELE...

It is firmly established. Read the article I linked.

Or non-EU resident investing in an EU real estate fund?

This will undoubtedly make some brexiteers very unhappy.

It's quite funny because Great Britain is the reason why the Spanish won their war of independence.

Good. I love this for them. Source: totally not still bitter Remainer.

Seconded. Bastards.

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?

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.

Those expats are residents though, and thus wouldn't be impacted by the proposal being discussed in the linked article.

>How many hundred that are I don't know, but they made "fun" news stories during those times.

Seems like every human story then. The few-and-far-between exceptions get magnified by 100-1000 times their actual significance by people on the other side.

Do you have figures?

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

What's causing it in the US?

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)

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.

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?

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.

>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.

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).

The Agricultural Land Reserve prohibits farmland from being sold for housing development. It's one of the oldest modern NIMBY policies.

Most of the land in BC is classified in this way.

Well that's not obviously bad I don't think? If Canadians want to be mad about pro-farm regulation, they should look to dairy; milk tokens, cheese availability, etc.

Are you saying prices didn't go up because of Chinese investors, or Chinese immigrants? I haven't heard anyone discussing immigration as a root cause

One should also add that (at least in Canada) newer buildings are not built for families but for investors. Who needs all of those 30 square meter studios?

they've slashed immigration, so I guess we'll find out. BC is also going to tax any sales after less than 2 years of ownership; I'm doubtful this will increase affordability or supply, but it will essentially kill the economic model of renovation & flipping.

I don't think it will kill "reno and flip" market. It will become "reno and rent-to-buy later", or "reno, hold and sell".

Seems Canada has a similar money-printing MO as the US. CAD money supply doubled in the past decade.

Too much regulation or greedy landlords depending on your political persuasion.

There's never been a time when people were not greedy.

The "suddenly, people started being greedy" meme doesn't make much sense.

People have indeed always been greedy, but the greediest are becoming more wealthy and powerful by the day.

Nah. There was this time when egg farms got greedy and raised the price. Then they became not greedy again and it's fine. Similar situation with software engineers. They got greedy and salaries went up. When they become less greedy, like rights now, things go down a little.

The point of the comment was not to present a full description of either position. It was to point out that everybody here is just going to reflexively provide their partisan answers to this question.

NIMBYism making it extremely difficult and expensive to build supply as is needed.

in 1946 the US had a population of 141M and built 700k housing units

in 2024 the US had a population of 336M and built 90k housing units

Where are these numbers from? How does 5 million housing units from 2020-2023 (this was published in 2024) translate into "90K housing units"

>The United States has added almost 5 million housing units since 2020, most heavily in the South and most of them single-family homes, making a housing shortage look conquerable in much of the nation.

https://washingtonstatestandard.com/2024/05/16/housing-boom-....

Parent used a single month’s count for the whole year

1946 was a special case. It was the start of the baby boom, kicked off by the victorious soldiers returning home and wanting to get on with life.

Your 90K number is a monthly number, not annual and only for single family units.

https://fred.stlouisfed.org/series/HOUST1F

It's also a delta being put alongside the absolute US population

"NIMBYism making it extremely difficult and expensive to build supply as is needed."

Only in some areas. There are other factors affecting how expensive houses are across the country, such as materials/labor, preferences for larger/fancier houses, location preference, and increasingly complex/expensive code.

> preferences for larger/fancier houses

And more space per person, so older houses now house far fewer than they used to. US has more bedrooms without an occupant than ever.

https://www.nytimes.com/2025/01/09/realestate/empty-bedrooms...

I wonder how empty-nesting attributes to this. My parents have 3 empty (really, repurposed) bedrooms in their house now. But downsizing in their area wouldn’t actually help financially, so they don’t.

In my case, most elderly relatives own their largest homes ever for when kids visit. So many bedrooms have never had a full time occupant.

Empty-nesting has been a thing for about 2-3 generations. Before that there were often multi-generation homes. But it seems like people didn't really up-size 2-3 generations ago. Many of the great generation were happy to build their 1000sqft Sears house and live there the rest of their lives. The last 1-2 generations seems to be more of a drive for trading up to bigger and better everything. Now we see empty-nesters in 2500sqft houses. I think it's natural to not not want to leave a long-time home, even if it is oversized and only filled on holidays for company or parties. But why do we really need that much space in the first place, seems to be more of the question.

Idk if the article says this (paywall), but: Home ownership is basically subsidized in the US. So to take full advantage of that, someone may want to buy the most expensive house they can afford in the place they want to live. If it has extra bedrooms, so be it.

> in 2024 the US had a population of 336M and built 90k housing units

That was one month’s worth. There were ~1.5 million built in 2024 in the US.

https://www.census.gov/construction/nrc/pdf/newresconst.pdf

> in 1946 the US had a population of 141M and built 700k housing units

I think the year after the second world war ended at which point marriages, and therefore household formation, went to unprecedented levels introduces a lot of noise into that signal

It’s always supply. It’s fair to criticize foreign ownership/hedge funds purchasing homes, but the overwhelming reason is that we are not building enough.

Sure, but it's one thing to not be building enough for people to live in, and another thing to not be building enough for people to keep empty flats as speculation vehicles.

When too many flats are used as speculation vehicles, the bubble pops and the problem solves itself.

Except at that point the wealthy homeowners will ask for bailouts.

How many % of flats are empty? At least in the US the hottest housing markets usually have the lowest vacancy rates. This makes sense, because the opportunity costs for leaving a property empty is higher, so owners are more tempted to rent them out.

The vacancy rates are deceiving though. If you have a place that is owned by someone and they are paying taxes on it, and it's not listed as a rental, it's not considered vacant.

In big cities there are definitely homes that are empty and not listed being used as a store of wealth. In fact just within view of my own home are two houses like that. Both owned by foreign families who wanted a safer place to keep their wealth than their own country (China and India respectively).

>The vacancy rates are deceiving though. If you have a place that is owned by someone and they are paying taxes on it, and it's not listed as a rental, it's not considered vacant.

Why would you lie like that?

https://www.census.gov/housing/hvs/definitions.pdf

Occupied Housing Units. A housing unit is occupied if a person or group of persons is living in it at the time of the interview or if the occupants are only temporarily absent, as for example, on vacation. The persons living in the unit must consider it their usual place of residence or have no usual place of residence elsewhere. The count of occupied housing units is the same as the count of households

Vacant Housing Units. A housing unit is vacant if no one is living in it at the time of the interview, unless its occupants are only temporarily absent. In addition, a vacant unit may be one which is entirely occupied by persons who have a usual residence elsewhere. New units not yet occupied are classified as vacant housing units if construction has reached a point where all exterior windows and doors are installed and final usable floors are in place. Vacant units are excluded if they are exposed to the elements, that is, if the roof, walls, windows, or doors no longer protect the interior from the elements, or if there is positive evidence (such as a sign on the house or block) that the unit is to be demolished or is condemned. Also excluded are quarters being used entirely for nonresidential purposes, such as a store or an office, or quarters used for the storage of business supplies or inventory, machinery, or agricultural products. Vacant sleeping rooms in lodging houses, transient accommodations, barracks, and other quarters not defined as housing units are not included in the statistics in this report. (See section on "Housing Unit.")

That happens once every 10 years. They use tax records and other records to estimate it otherwise.

Also people will just not return the form, and once again they have to estimate.

And in places that impose a vacancy tax, they have incentive to lie or deceive the housing authority to avoid the tax.

And in my neighbors case for example they come by once every few months to pick up mail and probably fill out those types of forms.

In reality there are a lot of vacant homes that aren't counted as vacant.

>That happens once every 10 years. They use tax records and other records to estimate it otherwise.

Good thing we did a census in 2020, and the housing crisis (and associated allegations about absentee owners) far predates that.

>Also people will just not return the form, and once again they have to estimate.

Apparently they're pretty persistent. If you don't fill out a form you'll eventually get an enumerator that shows up at your door.

>And in places that impose a vacancy tax, they have incentive to lie or deceive the housing authority to avoid the tax.

The housing authority is independent from the census bureau. Is there any evidence they share data?

>And in my neighbors case for example they come by once every few months to pick up mail and probably fill out those types of forms.

So they're willing to go out of their way and lie to the federal government in order to maybe move the lower the vacancy rate by 0.00001%, when many (most?) people (as evidenced by this thread) are going off vibes and likely won't care anyways? I didn't know that foreign vacant homeowners had such a tight knit cabal.

So let the people build enough to make houses being stores of wealth useless rather than engage in more govt control.

I think it's really important to press people on this point, because "vacant homes as an investment vehicle" gets trotted out as a thought-killing cliche.

Surely there are some pied-a-terre and vacant investment properties, but vacant rental housing in NYC for example was 1.4% in 2023. I'm not sure how they measure this, but even if you doubled the amount of available rental housing, it would still be an insanely hot rental market.

Places that have stable or decreasing housing prices (NoLa, Austin) have over 10% of rentals vacant.

I still have seen no evidence that VC-backed purchases are having any noticeable impact on the US housing market except possibly in 2 or 3 specific locales (and quite restricted ones at that).

So, whatcha got?

Well, the US could build ten thousand Burj Khalifas and the property tax from that would sustain Medicare for All.

If they want to pay lots of property taxes and contribute to payments for local infrastructure without actually using it, that’s probably a net good thing, IF there were enough additional homes to go around for others.

however, like roads, it is entirely possible that building more in desirable neighborhoods simply leads to more wealthy people having more options for which (otherwise empty) residence they choose to spend the weekend at.

The return on property is too good to pass up to an investor. This is a step in the right direction and need something like this in the UK.

Decades of public support for treating housing as an investment shaping zoning and other related policies, the relative profitability of constructing budget vs luxury housing, and more recently, inflationary monetary policy,

New development was made illegal in the places people want to live.

It's that simple.

Now, you may agree with the given reasons for making that development illegal (and/or very expensive), or you may not, but that is the undeniable end result of those policies. We made that bed, now we lay in it; we could theoretically un-make that bed overnight, but there's serious money (and political power) riding on making sure this problem never goes away.

A housing bust in 2008 washed a lot of capital and talent out of the house construction industry, and the current boom is hard to supply with construction capacity even when there is land to build on. And also, even if the land exists, there is already a SFH on it that needs to be torn down, so we are densifying at a slower rate than we need to. Couple that with an even increasing focus of good job opportunities into a few hot metros, the whole US housing market becomes one hot mess.

There are robotic construction companies like FBR, and plenty of open stretches of land along highway 101, 680, 880, etc.

There is a lot of cheap housing in the south and Midwest as well, but it isn’t very relevant since people are picky about where they want to live.

I wonder if it has something to do with advance economies growing at 1%-2% a year while the least developed countries are growing at 4% - 5%?

This would cause the demand for building materials to skyrocket as billions of people can enter the market to purchase lumber, steel, and energy who 10 years ago couldn't.

Same reason gold increases in $ value just by existing or people passively invest in S&P500. New money is created and it has to settle somewhere. There's plenty of cheap land or land that barely moves in value, but the desirable spots in cities are limited, so that's a natural place to invest.

Limited yes, but limited by regulation more than anything else. Within a 30 minute drive of SF there are hundreds of square miles to develop on. Pick a dozen at random and build residential skyscrapers. Problem solved.

That's pretty much what they're doing. But the apartment that probably requires driving 30 minutes (or 1.5hr train) to work is worth a lot less than something in SF.

Edit: SF itself does have strict zoning. But even if everyone there wanted max density, so they tore everything down and built skyscrapers instead (ignoring the soil problem there), it's a fixed supply of land.

Yeah I’m seeing some of the development but it’s mostly 5 story rather than 50, and very small total area compared to what would be possible.

The apartments are still quite expensive even an hour’s train ride away.

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.

I think I read 20,000,000 need housing and this will impact 20,000 per year so broadly the numbers are inline.

How can 20M be even remotely correct? Spain has a total population of about 48M.

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

Cities are rarely constrained by the willingness of someone to build housing, it’s generally more an issue of being allowed to build housing.

For the most extreme example just look at San Francisco here in the US, where the average number of legally-allowed new housing units is currently around 3.5 total per month (https://sfstandard.com/2024/04/08/san-francisco-new-housing-...) in a city of 873,000 people.

Cities typically don’t have draconian taxes on real estate.

~0.1% of real estate. If the major concern is these rules change nothing then that applies to both upsides and downsides.

No the issue with activities that constrain supply is that they might constrain more supply than the explicit units impacted by the policy.

This very slightly constrains demand not supply.

At most the knock on effects might impacts supply, but that’s up to the market to decide.

The impact on the market is precisely the concern. I’ve not seen any studies that show how taxing market participants differently impacts the supply in real estate. So I don’t have strong convictions one way or the other. But you can craft a narrative that foreign buyers are higher margin customers so drive builders to create at higher then their participation rate.

But more generally if you want more of something, generally I’m suspicious of efforts that make that thing more expensive.

You’re simply ignoring scale here.

Having what in practice is probably 1 in ~5,000 fewer customers has negligible impact on a housing market. That’s assuming many foreigners who would be buying a 3rd home will probably substitute longer term rentals but it’s not zero and from the perspective of customers any movement is positive here.

Pedantic nit: dampening is to wet, damping is to subdue oscillations.

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.

500$ on a 500k house might not seem like a big deal, but I’d still rather have the 500$.

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)

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.

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.

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?

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.

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.

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.

The UK first needs the will to do something. The UK is renowned for shell company purchases and laundering. What is wanted by the little home buyers is very different from what is wanted at the top of the pyramid. As the current uproar about the decades long grooming atrocity has shown the rot runs deep.

Do you think it is bad when foreign investment corporations buy commercial property? This is very common in London. Or only residential property? And, were you upset when foreign capital (Malaysian, mostly) helped to redevelop Battersea Power Station?

> every week I can see ads for "we buy your house, paid upfront over market value, Chinese investors"

It specifically calls out that they're Chinese? Are you sure this isn't a political stunt?

Yes, it literally says Chinese investor.I guess it's to make the idea of buying immediately a flat with cash sound less shady.

I have no idea of the reasoning why specifically Chinese people invest in Spanish real state paying with cash, it's just what I see.

>Are you sure this isn't a political stunt?

It's our president's whole thing to take measures that sorta move the needle in a good direction but are focused on being good moves politically. My guess is he needs to act against rent prices, he can't go after the big guys (blackrock, etc) for fear of retribution and he can't go after the regular joe that buys a second house as investment. Foreign investors don't vote, so they're the next best option.

For the last years we’ve had 500K immigrants coming every year. That’s what’s causing inflation.

Printing massive amounts of money is what caused the inflation.

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.

Do you need specific evidence that additional demand causes price increase when the supply is pretty much fixed?

Of course, it's just more demand, like immigration, aging population and so on. Of course those are a much more difficult target..

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?

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.

Just tax land value.

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?

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-as...

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.

Disagree with logic that most will sell. Many people will incur high tax bills (if the property appreciated) or transaction costs to move. People who bought in the 2010s have mortgage rates that don’t exist anymore. Many had a reason to live in the area to begin with.

- Many will rebuild to move back

- Some will sell their lots to investors

- Some will rebuild using insurance money to flip upon completion

In situations like this, my assumption would be that it doesn't really get calculated so much as it gets measured... to be kind to victims, you might want to assume it drops for tax purposes temporarily, and then raise the valuation once bids go through and you get some post-fire data points.

One problem is that the calculated or measured land value will recursively affect the value of the land.

> How do you calculate the unimproved land value?

The first thought that immediately came up for me:

- Take the average property value per sqft for each given property

- Multiply it by a fixed percentage

- Take the (your favorite mean / average type) value per sqft and apply that to the empty lot

If that undeveloped land and its surrounding developed areas are controlled by one entity: Recursively expand outwards to factor in the value of the surrounding areas as well.

Compared to the methods outlined by fastball's link [0] later in the article, it's much more weighted towards public valuations & has fewer subjective areas, with the cost being that it can be gamed if certain properties were sold cheaply (but then that's an auditing issue).

No solution would be a silver bullet, but it's 70% silver, and that's good enough to start from.

[0] https://www.gameofrent.com/content/can-land-be-accurately-as...

> 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?

IMO, the land value is lowered because of the destruction of the properties built on top of it, on top of the rebuilding costs that will come later.

> Or is the value actually higher now that a developer can come in and remake an entire neighborhood?

Not until (a) the land is actually developed, or (b) the market reflects that decision back onto the land values for that area.

This is they way. This would fix so many things.

> Just tax land value.

Another great way to kick out the undesirables^H^H^H^H^H^H^H^H^H^H^H^Hpoor!

That's valid criticism, it can certainly lead to that if implemented poorly. However, two of the goals of taxing land value are A) increasing the supply of housing and B) discouraging speculative land hoarding — one of the major drivers behind unaffordable housing.

- Let the owner pick a land value freely

- Calculate land tax based on that

- If someone offers the owner more than the value they picked, they have to sell

:-P

Canada should follow suit

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.

like house prices falling to affordable levels?

That is the intended and predicted concequence. unintended is things you didn't think of and they can take a long time to appear.

as a canadian, i’m willing to take the chance (s)

>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.

an “unintended” consequence

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.

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.

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.

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.

The article says they are also targeting tourist rentals.

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.

That's essentially an export tariff.

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.

>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?

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.

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.

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.

believe it is new purchases

>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.

> property isn't a productive asset

It is when you rent it out.

Literal rent seeking behavior from foreign investors.

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.

Vacant property is quite a drain on one's pocketbook.

Try it some time.

When I move and sell the old house, I underprice it to sell it as fast as possible. The other sellers do not seem to understand the time value of money, the maintenance cost, the taxes, the vandalism, and the squatter risk. Oh, and your insurance goes up if the house is vacant.

And never mind having $800,000 or so tied up as a millstone around your neck when you could be investing it in stocks.

Generally yeah, but idk what it's like in Spain. If the gains are huge or the renters' protections are nuts, it could theoretically make sense to keep vacant.

If there isn't high vacancy in Spain, this is moot

> a complete catastrophe for any foreign investment in Spain from now on

No doubt because

a) all foreign investment always comes with individuals from the investment source purchasing homes in the investment target country

b) Germany is no longer foreign when it comes to Spain, so any money invested by Germany would not count as "foreign investment"

Am I right?

What make you think it would apply retroactively? Taxes rarely do, I can’t even think of a single example (but would be happy to learn about one).

Putting someone else’s name on the deed is a very bad idea for several reasons. I really can’t imagine anyone doing that, unless it’s a trusted family member or something like that.

California is notorious for implementing retroactive taxes, having done it multiple times. I can't think of an example from another jurisdiction though.

Housing prices in spain and portugal are booming to astronomical degrees mainly because of china. This bill is specifically targeted to stop that without explicitly calling out china. Middlemen cost money, making it more expensive to buy houses, which serves the purpose to restrict the market outside of non-eu residents.

What's going to realistically happen is foreign investors will claim quick citizenship in a relatively poor and more corrupt eu member state and then buy the property.

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-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.

> one of the national papers of record, El País

El País has basically become the socialist government's PR department.

Would it work or would it just make things worse?

It will make things worse

Easy! It won't work and it would make things worse.

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)

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

what about corporate ownership?

In order to justify a corporate purchase, there needs to be a return on investment. A vacant property is not that.

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.

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.

> what about corporate ownership?

Homes, and real estate in general, should not be an investment vehicle. Screw those corporations.

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