BRUTAL TAX INCREASE FOR BRITISH BUYERS OF HOMES IN SPAIN
I am not sure whether the socialist-communist government of Spain likes foreign buyers. It certainly does not seem to show it. In fact, one could come to the opposite conclusion.
A recent example of this is the abolition of the golden visa in Spain, whereby wealthy individuals could purchase a Spanish property of substantial value and obtain a residence visa in exchange. The abolition of this possibility will soon come into effect.
Now, in a recent speech by Spanish President Pedro Sanchez, he certainly seems to have “put the cat among the pigeons” as the British say.
He is understood to have announced that his government is proposing to double the transfer tax on non-EU buyers of property in Spain. This would hit UK-resident buyers hard – you know, because of Brexit.
Such a drastic tax increase would mean that the tax for these investors would rise from 7% to 14% in Andalusia, with the increase being even higher in some other parts of Spain; for example in the Valencian Community the tax rate would rise for the punished Brits to 20% on average. For example, for a 200,000 Euro home, the tax would be a mere 40,000 Euros.
But it could be worse, although I refuse to believe it. Listening to the President, what he says verbatim is that the intention is to increase the tax for these buyers up to 100% of the value of the property. In other words, the purchase price would double. I refuse to believe such legal nonsense, but in these times, who knows.
One might think that raising taxes is not always the best way to promote growth, investment and wealth creation in Spain, but it seems that every public building in Spain should have a sign at its entrance saying “in case of emergency, pay taxes.”