British experts predict buyers will turn to Cyprus following Spain’s planned property tax hike

Experts speaking to the UK media suggest Britons will invest their money in locations including Cyprus if Spain goes through with its plans for a 100% property tax for non-EU citizens

As part of efforts to ease the country’s housing crisis, Spain is planning to introduce a tax increase of up to 100% on properties purchased by non-European Union residents, including Britons.

The country’s Prime Minister, Pedro Sanchez, has said the overall goal is to provide “more housing, better regulation and greater aid,” noting that in 2023, non-EU residents had purchased 27,000 properties in Spain “not to live in” but “to make money from.”

As reported by media outlets including The Daily Mail, Toby Leek, president of property professionals’ body NAEA Propertymark, for example, has stated, “Many Brits may take the news of heightened property taxes in Spain as a blow considering moving to such a location could well have been a lifelong ambition, especially with the convenient location and, of course, the improved weather it provides.”

He said that, while it can be appreciated that Spain is addressing its own housing emergency and looking after Spanish citizens, the proposal is “quite an extreme increase.”

As reported by The Daily Mail, Leek added, ‘Many Brits will likely be put off by this extreme hike in property taxes and will be looking to other countries such as Cyprus and Greece with lower property tax levels for their dream home move.’

Stephen Abletshauser, private client partner at Spencer West LLP, meanwhile, told British journalists, “This populist move by the Spanish government may well prove to be a long-term own goal,” adding, “The likes of Turkey, Italy, Malta, Cyprus and even France will welcome this decision in a fiercely competitive market for wealthy non-residents retiring in the sunshine.”