Prompted by the recent story of Spain’s rumoured property tax, it seems appropriate to dust down the most famous quote of Lance Corporal Jones before taking a closer look at the issue.

However with the dust settling on the headline it’s worth a closer look – with arguably the most reasoned treatment being issued by A Place in the Sun last week.

While some stories have been suggesting it is a done deal, it is far from it.

Why it may never happen 

This proposal may not be passed through the Spanish parliament for several reasons. It may not even be put before Parliament. At present it’s just an idea.

The Left-wing government is a minority coalition and has struggled to get its desired legislation through parliament. There will be a lot of opposition to this proposal as construction and house building generate a lot of jobs in Spain.

The purchase transfer tax ( equivalent to the UK’s stamp duty ) is not levied by the central government. The tax takes place at an autonomous, regional level so it is hard to see how this can be imposed on opposition-run regions such as Valencia and Andalucia. It may be more of an encouragement to areas like Barcelona to raise their own levels of stamp duty.

Finally, some legal experts are questioning whether it goes against a clause about fair taxation in the Spanish constitution, and possibly EU law.

So what now for buyers? 

In the short-term this announcement will no doubt persuade some buyers to expedite their purchase.

If this were to become law, British buyers would be able to rent a property in Spain, become resident and subsequently buy a property without paying this tax. To become resident they could get a Non-Lucrative Visa or Digital Nomad Visa. For holiday homes it looks like it may also be legally possible to avoid the tax entirely by buying through a Spanish company.

 

Credit: the full version published by A Place in the Sun (January 2025). Click here to view