Adios, Spain? New Regulations Could Be Locking Out British Buyers

Spain was once the golden ticket for British expats. Hundreds of thousands have snapped up villas on the Costa del Sol or retirement boltholes in Barcelona in the past 30 years, lured by the promise of the good life.

Spanish governments welcomed these new residents – and their cash.

But for would-be expats today, there's an unwelcome chill on the Iberian breeze. A groundswell of anger towards foreign property buyers has prompted a flurry of legislation that threatens the British expat dream in Spain.

The latest blow is a bill in the Balearic parliament that could ban non-residents from buying homes on the archipelago, which includes the islands of Mallorca and Ibiza. The legislation would allow areas with particularly stressed housing markets to prohibit the purchase of homes by “non-residents”, defined as those who have lived on the islands for less than five years.

For the past few years there has been a fierce backlash against tourists and short-term holiday lets. Protesters have soaked visitors with water pistols in Barcelona and marched through the streets of Palma in Mallorca to oppose rising numbers of holidaymakers and declining living standards for native Spaniards.

The anger has translated into a tax and regulatory squeeze. In April, the government axed Spain's famous golden visa scheme, which offered non-EU citizens residency rights in exchange for a €500,000 investment, typically in property.

Spanish tax authorities have been accused of a crackdown on foreign residents making use of “Beckham Law” tax breaks that were designed to encourage the wealthy to move to Spain.

And perhaps most alarming for prospective expats is the proposal of the country’s socialist prime minister, Pedro Sánchez, to impost a 100% tax on the value of properties purchased by non-residents living outside the EU. Even if the threats of taxes and bans amount to political posturing, the Balearic debate suggests that measures once seen as extreme are entering the mainstream in Spain. Is this all just a storm in a teacup? Share your thoughts on the subject with Abode2.

Written by Laura Henderson, Editor at Abode2.