British expats who leave their Spanish properties sitting empty could face tax penalties of up to 100 per cent under new legislation proposed by the country’s socialist government.
The measures, announced on Wednesday, would also hit owners of multiple properties with surcharges as high as 150 per cent.
Spain is grappling with a deepening housing crisis that has triggered mass protests across the country and drawn international attention following the eviction of an 87-year-old woman from her home of seven decades.
The proposed law, which still requires Congressional approval, takes direct aim at foreign property owners and holiday lets as the government seeks to free up housing stock for local residents.
It represents one of the most aggressive interventions yet by a European government targeting unoccupied homes.
Under the current system, Spanish homeowners pay an annual property tax known as IBI, which functions similarly to council tax in the UK.
Rates are calculated using a central government valuation and local municipality charges, ranging from 0.4 per cent to 1.3 per cent of a property’s assessed worth.
The proposed legislation would empower local authorities to impose a 50 per cent surcharge on homes left vacant for two years.
After three years of sitting empty, that penalty would double to 100 per cent.
Owners holding two or more properties would face an even steeper maximum surcharge of 150 per cent, according to official documents.
Town halls in areas under pressure from overtourism would also gain new powers to levy higher council tax on holiday lets. Short-term rental properties would additionally be subject to a 10 per cent VAT charge.
The proposals come in the wake of the forced removal of Maricarmen Abascal, an 87-year-old wheelchair user who was carried from her flat into an ambulance on September 23.
Ms Abascal had lived in the property for 70 years but was evicted after her rent was increased to more than €1,500 (£1,285), over three times what she had previously paid.
Her landlord, Spanish property company Urbagestión, purchased the flat in 2018. Ms Abascal has since returned home after reaching a new rental agreement with the firm.
The incident sparked nationwide demonstrations, building on protests that began in April 2024 across Barcelona, Málaga, San Sebastian and the Canary Islands. Public anger has largely focused on holiday lets, including Airbnb, as a driver of the housing shortage.
Spain’s housing minister, Isabel Rodríguez, said: “Congress has the opportunity to tell Maricarmen that her suffering was worth it … and that many people will benefit from her battle.”
Alex Radford, a lawyer at My Lawyer In Spain, was sceptical about the impact of the measures.
“The law gives town halls that have housing stock under pressure the ability to charge more local rates for properties rented out as tourist properties,” he told The Telegraph.
But he added: “This is a plaster. Spain needs to build more properties and make the planning permission process more efficient and quicker.”
The government has also proposed sweetening the deal for those willing to sell vacant homes to the state.
Properties sold to Spanish authorities for less than €200,000 (£171,000) would be exempt from capital gains tax, while those worth under €800,000 would benefit from reduced tax bills.
Further measures put forward include protections against eviction, automatic renewal of rental contracts and support for first-time buyers.
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