Could You Avoid Spain’s New 100% Property Tax
How Non‑EU Foreigners Could Bypass Spain’s Proposed 100 % Property Tax
A proposed Spanish law would impose a 100 % surcharge on the taxable value of second-hand properties bought by non‑EU, non‑resident buyers—effectively doubling the purchase price. However, legal experts have identified a key loophole: new-build homes purchased directly from developers are exempt from this hefty duty tax.
📌 Key Facts & Clarifications
Tax Basis
The surcharge targets the “taxable base” of the property (the higher of declared, market, or cadastral value), not the standard regional transfer taxes (ITP/AJD, which range from 6–11 %)
Example: For a property valued at €100 000, a non‑EU, non‑resident buyer would end up paying roughly €200 000—minus any standard transfer taxes already applied.New‑Build Exemption
Properties sold new by a developer are subject to VAT, not transfer tax, and thus fall outside the scope of the proposed 100 % surcharge. Spain’s tax regime doesn’t allow this tax to apply to VAT-applicable transactions.Business-to-Business Dealings
Transactions involving two entrepreneurs or professionals—where VAT is applied—could also escape the surcharge via a similar mechanism.Status of the Proposal
This is still a draft law, awaiting parliamentary approval and likely facing legal challenges. Critics, including Spain’s Registry of Tax Advisors, warn it could be deemed confiscatory, and may violate EU capital movement rules
🔍 Legal Insights
REAF Tax Advisor Registry confirms the VAT loophole: VAT-applicable properties won’t trigger the surcharge .
Experts like Mallorca lawyer Alejandro Del Campo note the impracticality of applying the tax where VAT already governs the transaction.
EU legal grounds: Lawyers anticipate court challenges citing breaches of EU freedom of capital and discriminatory policy.
| Buyer Type | Affected by Tax? | Notes |
|---|---|---|
| Non‑EU, non‑resident (second-hand) | Yes | Pays full 100 % surcharge on taxable value |
| Non‑EU, non‑resident (new-build) | No | VAT applies instead; surcharge inapplicable |
| Entrepreneur-to-entrepreneur | Likely no | Tax structure allows opting into VAT to avoid surcharge |
✅ Final Takeaway
The 100 % surcharge draft law aims to deter non‑EU, non‑resident second-hand homebuyers—and, if passed, would immediately double the real cost for eligible buyers.
However, new-build purchases from developers remain fully exempt, thanks to VAT rules.
Until the bill becomes law—and survives both parliamentary debate and legal scrutiny—its final scope and impact are uncertain.
If you own or are planning to buy property in Spain as a non‑EU, non‑resident, purchasing new-build units or engaging in business-to-business deals could shield you from the proposed tax. That said, consult us here at SGM Abogados to keep ahead of any legislative or judicial changes.
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