Spain Plans Increase in Property Taxes
The BBC reported at the end of January that the Spanish government is intending to bring in a tax of up to 100% on properties bought by non-EU residents, a move to try to address the housing crisis in the nation. Prime Minister Pedro Sánchez explained to a Madrid economic forum that 27,000 homes had been bought as investment properties in 2023 and that, given the housing crisis, this ‘obviously’ could not be allowed.
Sales to non-residents overall constitute some 15% of Spanish properties (87,000 out of 583,000 sales in 2023). Sanchez commented that:
“The West faces a decisive challenge: To not become a society divided into two classes, the rich landlords and poor tenants.”
It is not yet known exactly what the terms of the new tax will be, or its timeline. Local property experts told the BBC that the proposed move will simply prioritise buyers from within the EU, such as German or French investors, and that this will discriminate against non-EU buyers while still failing to resolve Spain’s housing crisis.
Antonio de la Fuente, MD at Colliers International Spain, agrees, explaining to the BBC that:
“We all agree we are in a problem of not enough supply and we need to produce new supply to give people migrating from other parts of Spain to big cities like Madrid, Valencia, [and] Malaga a new home. But this will be a drop in the ocean in my opinion and there will be other alternatives that will have a higher impact on the housing market.”
Even though the timeline of the new tax has not yet been revealed, UK buyers told the press that they were already thinking twice about buying in Spain – even if a buyer gets in under the wire before the proposed tax comes in, selling to another non-EU national (in, for example, a tourist region such as Malaga) could prove tricky, as buyers obviously won’t want to pay the 100% tax. The spectre of a retrospective tax being placed on existing buyers was also raised by some prospective investors.
The Spanish government has been looking at a number of other measures to address the housing emergency: such as tax exemptions for those landlords who provide affordable housing, the transfer of property to a new public housing body, plus higher taxes on tourist housing.
Individual cities have also been taking measures of their own, such as in Barcelona, where Mayor Jaume Collboni is trying to put an end to short-term tourist lets, warning that he is not intending to renew over 10,000 licences to landlords when they come up for renewal late in 2028. This is another move in the effort to free up tourist housing for locals, given rent hikes of around 68% in the last decade.
If you are a non-EU national wanting to purchase property in Spain, it is well worth keeping an eye on these developments.
USA: WEP (Windfall Elimination Provision)
Brits who get a UK pension as well as benefits from the USA could benefit from the abolition of WEP under the Senate’s ‘Social Security Fairness Act,’ financiers said in January. The new legislation aims to streamline the system so that expats – for instance, Brits living in the USA – can claim the full US benefits to which they are entitled. WEP has long been a thorn in the side of those who say that it unfairly penalises British nationals resident in the States who are recipients of a UK pension and who, under WEP, have seen their American benefits significantly reduced – in some cases, by several hundred dollars a month.
The bad news is that this may not come into force immediately, so although benefits should be backdated to 2023, you may have to wait a year for your money. A hiring freeze and staff shortages are hampering progress, and it also remains to be seen whether the impact of the new Trump administration will have an effect. Newsweek says that it has been told by the Social Security Administration that the latter “is determining the timelines for implementing this new law [and that it will] provide more information on [its] website as it becomes available.”
New Zealand: ‘Golden Visa’ Rules to Change
Whereas some countries, such as Spain, are scrapping their ‘Golden visa’ programs, others, like New Zealand, are expanding their provision. Immigration Minister Erica Stanford told the press that the Active Investor Plus visa would undergo changes from April 1, 2025, including the removal of an English language test and an expansion in acceptable investments.
The aim of these visas is, of course, to give local economies a boost by attracting wealthy expats, and the New Zealand administration says that it lacks capital.
It’s taking a number of measures to address this, including the establishment of a one-stop shop for overseas fund managers, and streamlining the regulations on remote working in the hope that this will appeal to digital nomads. Stanford says:
“Capital is highly mobile and in an increasingly complex world, people are looking for a safe and stable country to do business. We are now making our investor visa simpler and more flexible to incentivize investors to choose New Zealand as a destination.”
The visa previously generated around NZ$1 billion but saw a decline, with only 43 recent applications. This drop has been attributed to rule changes, prompting New Zealand to expand its eligibility criteria.
From now on, there will be two categories:
- A minimum investment of NZ$5 million. This will need to be invested into businesses or managed funds over a three-year period. Visa holders will need to spend a minimum of 21 days in the country.
- A minimum investment of NZ$10 million. This will need to be invested into stocks, bonds or property development over a five-year period. Visa holders will need to spend a minimum of 105 days in New Zealand, but you can diminish the time by investing more money.