PROPERTY SEARCH
The reason why Spain cannot stop foreigners buying property
Only four EU countries have managed to impose restrictions on non-national home buyers
The Spanish municipal elections are coming up this weekend and many politicians up and down the country are offering the seemingly impossible to secure votes. But one proposal put forward by left-wing Podemos has raised more than a few eyebrows: the populist party has vowed to limit the purchase of housing by foreigners and non-residents in all the municipalities where they have power.
This controversial idea isn’t exactly new, since the government of the Balearic Islands has been petitioning the European Commission to implement similar restrictions for years now, something which the powers that be in Brussels are hesitant to do.
The main reason, according to Mairead McGuinness, the European Commissioner for Financial Services, is Article 63 of the Treaty on the Functioning of the EU, which prohibits restrictions on the movement of capital related to the acquisition of real estate, including homes, by non-resident EU nationals.
And even the majority of the current Spanish government is sceptical about the legalities, since left-wing party Unidas Podemos recently failed to gain approval for an amendment that would limit the number of tourist rentals on offer in the busiest and most stressed destinations. If passed, this would have included major cities like Barcelona, Valencia and Malaga but also holiday favourites such as Torrevieja, Benidorm, Marbella and Mijas.
However, another similar proposal in Alicante could slip under the radar, since the EU regulations do grant exceptions once the restrictions are justified for reasons of public order or security, or reasons of general public interest.
In fact, several European countries have successfully argued their case and imposed restrictions on foreign home purchases. It’s worth noting though that these nations negotiated the property bans in treaties before joining the EU. Spain, on the other hand, joined the EU without any such agreement in place.
Currently, only four countries have been allowed to apply restrictions on home buying by non-residents: Malta, Denmark, Finland and Croatia. Beyond the borders of the EU, Canada famously banned non-nations from purchasing property when house prices doubled between 2010 and the end of 2021. Australia and New Zealand have also imposed restrictions on non-residents.
Image: Pixabay
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