A Spanish political party in the Valencia region, Compromís, has presented a series of amendments to Spain's Housing Law, among which it proposes a new regulatory provision to emulate the measure adopted by Canada to temporarily prohibit the sale of homes to individuals or legal entities without Spanish nationality, i.e. banning the sale of homes in Spain to foreigners.
The left-wing coalition party member Carles Mulet pointed out that Canada has taught the world a lesson by banning the purchase of homes by non-resident foreigners for two years from 1st January in order to control prices, as the purchase of property in this country has become an object of speculation, according to the coalition in a statement. "The situation in Canada with this phenomenon is not superior to what is already happening in many areas of Spain," Mulet warned when talking about the initiative to ban the purchase of homes by foreigners in Spain.
Specifically, Compromís' proposal is to apply a 36-month moratorium on the sale of homes to non-Spanish individuals or legal entities (entities and companies), or those who do not hold this nationality status within a year prior to the purchase of the property, from the entry into force of Spain's new Housing Law.
The Valencian party has pointed out that this prohibition would not apply to foreigners with a work permit in Spain for a minimum period of three years prior to the year in which the purchase was made and who have not bought more than one residential property.
The prohibition proposed by Compromís also has other exceptions. It would also not include refugees or those in a situation of accredited vulnerability who have not purchased more than one residential property; as well as citizens without Spanish nationality with valid temporary resident status, for a minimum period of five months prior to the purchase of the property, and who have not purchased more than one residential property. Entities whose objective is the social use of these homes would also be exempt.
In November of last year, the Balearic government agreed to discuss whether it would be beneficial to limit the number of properties that non-resident foreigners can purchase in the archipelago. Subsequently, there were also requests in the Canary Islands to restrict non-residents and foreigners from buying properties.
However, from a legal perspective, banning foreigners from purchasing a home goes against the EU's rules on the free movement of people and capital, which is also applicable to non-EU citizens. Therefore, any legislation that Spain might enact would need to demonstrate that foreign property purchases are directly impeding Spaniards from exercising their fundamental right to housing.
In the second half of 2022, foreign buyers accounted for 21.1% of all property purchases in Spain, which is the highest figure on record. Non-residents, in particular, spend more than foreign residents living in the country, with Swiss, Swedish, Danish, and American buyers being the biggest spenders at an average of €2,558/m2.