In this week’s Inside Spain we look at why the potential return to power in 2027 of Spain’s conservatives could thwart a supertax for foreign buyers and other dissuasive measures aimed at non-residents.
Restrictions on foreign property buyers were again in the news this week in Spain.
In the Balearics, PP and Vox representatives voted down a proposal to limit property purchases by non-residents, the same as they did last year.
In the Madrid dormitory city of Getafe, Vox proposed tax breaks for Spaniards in response to what they called the “massive” purchase of homes by foreign capital in and around the Spanish capital. Whatever it takes for “Spaniards to come first in Madrid”, said the far-right party’s spokesperson Isabel Pérez Moñino.
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It’s a similar proposal to the one Vox presented in Congress last year – increase taxes for foreign property buyers in Spain, with the aim of using the money to give tax breaks for Spanish citizens and promote the construction of subsidised housing.
However, the PP regional government of Madrid, headed by Isabel Díaz Ayuso, has reportedly shunned the idea of a differentiated property tax system for foreigners and Spanish nationals.
This is somewhat ironic as in 2024 Ayuso introduced the Mbappé Law, which rewards high-earning foreigners who settle and invest in the region by giving them tax breaks.
READ ALSO: How foreigners in Spain’s capital can pay less tax with the new Mbappé Law
The People’s Party appears to stick to its guns when it comes to being pro-business and against any restriction on the free movement of capital from overseas.
They also have little faith that any restrictive measure by the Sánchez government will come to fruition. President of the Balearic Islands government and PP member Marga Prohens stated recently in Ibiza that it is “impossible” for the European Union to allow bans on purchases of housing by foreigners, at least EU citizens.
PP leader Alberto Núñez Feijóo has positioned himself against the interventionist measures in the housing market proposed by Pedro Sánchez’s government, namely the proposed 100 percent tax that would double the price of Spanish properties for people residing outside the EU.
Feijóo was also against Spain’s golden visa being axed last year, the scheme introduced by his own party a decade earlier which gave non-EU nationals residency in return for them buying a Spanish property worth at least half a million euros.
INTERVIEW: ‘Spain’s golden visa will return with a change of government’
As for Vox, their stance is a bit less clear. Why propose tax measures that favour Spaniards over non-natives only to vote two years on the trot against restrictions for foreign buyers?
They want a “Spaniards first” approach but have labelled possible limits on foreign home purchases in the Canaries or Balearics “xenophobic”. Santiago Abascal’s party doesn’t appear to be practicing what it preaches.
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According to the latest polls, next year’s general election in Spain will likely result in the centre-right PP gaining more votes than the ruling Socialists, as well as Vox continuing to consolidate itself as the country’s third political force.
A right-wing alliance between Vox and PP at a national level could very well happen, as it has done in several regional governments already.
In none of these autonomous communities where they govern together has there been any measure introduced to curb foreign property purchases, and these include regions which are very popular with foreign buyers such as Murcia and Valencia.
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Even if Vox acts as kingmaker for the PP and that gives the far-right party some bargaining chips, they will likely prioritise tougher migration measures over any ban on foreign buyers. Put bluntly, they would target migrants, not ‘expats’.
As for the PP, the closest Feijóo has come to admitting the impact foreign investors may have on affordable housing for locals is saying that prices in Madrid have increased due the “very high” arrival of “high-income” Latinos who buy flats in the capital.
Other than that, the PP has said it’s in favour of tax breaks and other measures which incentivise buying homes rather than punitive actions against foreigners or others.
If the PP and Vox do end up governing in Spain, it’s hard to envision a scenario where they turn their backs on foreign capital, let alone introduce measures seen as ‘socialist’ and put forward by Pedro Sánchez.