Spain imposes “100% tax” on homes bought by foreigners. Will America be next?

Photo above - Pedro Sanchez solves Spain's housing problem with a stroke of his pen.

Sheesh . . . talk about being unfriendly to immigrants. Spain doesn’t want them. Can’t keep them out, but Spain CAN keep them from buying houses. What’s wrong with this idea? (see AP news link below).

This is the brainchild of Spanish Prime Minister Pedro Sanchez (different guy than the one in Napoleon Dynamite). His reasoning, and I quote: “To provide more housing and regulation”.

I’m not sure how PREVENTING people from buying houses causes more construction. This seems to fly in the face of economic theories championed by Keynes, Milton Friedman, Paul Samuelson. And even David Ricardo, though he wasn’t Spanish either.

If Pedro wanted to reduce foreign consumption of houses, he should simply ban migrant entry. But stopping real estate transactions means they will simply arrive anyway, and rent. Think for a moment about this, Pedro. Okay – are we ready to continue?

If any head of state is seriously interested in affordable housing, they would enact policies to make it easier to build homes. There is, in fact, a shortage of homes in Spain. But since 78% of Spanish citizens already own their homes, instead of renting, the “no foreigners allowed” rule seems even more bizarre. On the basis of home ownership, Spain is way ahead of even the USA (65%). Although that US percentage may be declining due to the 12,000+ (and counting) homes burned in Los Angeles over the past week. Los Angeles rental companies are already jacking up prices, of course. Probably sporting goods stores are doing the same on tents.

The problem is, Spain cannot (legally) keep migrants out. If someone takes a plane, train or automobile from any of the 27 EU member nations, they don’t need a passport to arrive. It’s like moving from California to Texas. Just pack the car and go. But Prime Minister Pedro cannot legally keep THOSE folks from buying homes, or cars, or getting jobs either. It’s all allowed by the EU constitution.

So the “foreigners keep out” rule is apparently targeting citizens of the USA, Canada, China, Russia, India, Pakistan . . . who have no legal right to do anything in Spain.

Tip to Pedro . . . if you REALLY sat down and thought about it, you’d do something more creative. Like “tax rebates” for building new homes. Both citizens and new arrivals. Rather than locking down the sale of existing homes.

I’m just sayin’ . . .

Why is Spain considering a 100% tax on homes bought by non-EU buyers? | AP News

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Avectoijesuismoi · 31-35

It is a completely idiotic plan but I can see some of his fellow EU countries like Greece, Portugal, Cyprus, Malta, Italy taking full advantage and attracting those would be buyers to their countries instead to boost their property markets. They will all be saying Way you go Thank you Pedro.
Secondly having people from outside buying homes is not a bad thing they bring other things like employment as often with the high end ones they are placed into a management structure to keep them up in peoples absence. High end also brings lots of spending power in as well when they are at their home so extra revenue.
There are also already loads of high end homes currently for sale in various parts of Spain Marbella being one, so he has just about killed that market with his pen, it might just get to the point where those homes get abandoned when they can't be sold and the people stop paying the on site staff and property taxes etc. They already have some of those there. some even have home loans that also aren't being paid anymore the banks took them back but are now stuck with them as well. There is in fact one they have tried to auction 3 times and haven't got any bids
So his policy is going to have some unplanned for knock on issues too
Add to that the fact that the banks are also having to service the maintenance costs and the property taxes in the interim as nobody is going to pay a big number for a wreck of a house when there are others available

MethDozer · M

@Avectoijesuismoi Homes in any country should be for the citizens of the country. Period. Foreign investment out pricing locals out of housing is a very, very bad thing. One of the worst things in fact. gentrification in any form of a very, very bad thing.

Avectoijesuismoi · 31-35

@MethDozer It is two different markets completely that are operated, and I own homes in several countries well shale we more correctly say properties for financial gain

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SusanInFlorida · 31-35, F

@Avectoijesuismoi According to recent news reports, Spain is already experiencing "adverse unexpected economic outcomes" from the 100% tax, and President Pedro is considering walking the new taxes back.