Alex Trelinski
REAL Estate agency associations on the Costa Blanca have slammed a proposal from Prime Minister Pedro Sanchez over introducing a 100% stamp duty style tax on property purchases made by non-EU citizens.
Alicante province accounts for over 20% of Spain’s international property purchases with fears that businesses will be brought to their knees.
Associations are claiming that thousands of property sales are threatened and the proposal has already caused major uncertainty among buyers from countries like the UK.
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The measure also threatens potential clients from countries like Norway and the Ukraine.
The Alicante Provincial Association of Developers (Provia), the College of Real Estate Agents, and the real estate agency association Asicval described the new tax plan as ‘absolute nonsense’.
Miguel Galindo from Asicval in Alicante said that anxious buyers who have reserved off-plan properties are already ‘inundating agents’ with questions about the potential impact on their pocket and whether they can back out of purchases.
The lack of clarity from the government has also left real estate agencies unable to provide any definitive answers.
The government has yet to add any meat to the bone and whether the 100% tax will affect all non-EU buyers equally, such as an investor from Dubai or a British citizen seeking a retirement or holiday home.
No timelines have been mentioned for the tax to start or whether some countries- especially in Europe- might be exempted.
The potential consequences of a tax can be clearly seen in Alicante province, where in the latest figures going back to 2023, 30,072 foreign buyers purchased properties- 20.43% of all foreign transactions in Spain, generating over €5.6 billion in revenue.
In terms of non-EU countries, UK buyers came top with 3,942 purchases, followed by Ukrainians (1,400), Russians (1,291), Moroccans (851), Norwegians (762), Algerians (702), Swiss (317), and Chinese (236).
Those groups accounted for over a third of foreign transactions in Alicante province and while the figures do not distinguish between EU residents and non-residents, the real estate sector estimates that thousands of deals could be affected each year- perhaps over 5,500 homes.
Jesualdo Ros, general secretary of Provia, expressed deep concern over the potential fallout.
He said that years of efforts, such as attracting American investors to the Costa Blanca, could be undone.
Ros also emphasised that homes targeted by non-EU buyers- often beachfront properties- do not overlap with the types of housing sought by young couples or local families.
He questioned the rationale behind a policy that does not address Spain’s housing affordability issues but risks alienating a crucial segment of the market.
Marife Esteso, president of the Alicante API College, echoed these concerns, stressing the economic importance of residential tourism.
She pointed out that foreign buyers not only invest in property but also inject money into local businesses and services during their stays.
Esteso dismissed Sanchez’s proposal as ineffective, suggesting instead that the government focus on increasing land availability and providing legal guarantees for rental property owners to address housing shortages.
Miguel Galindo from Asicval says that potential British clients, alarmed by the Sanchez announcement, are seeking reassurances.
He stated that even the suggestion of a 100% non-EU tax has already disrupted buyer confidence, which could have lasting repercussions for the region’s economy.
